With hundreds of thousands of laid-off employees facing a loss of a federal subsidy of their COBRA health insurance premiums, more lawmakers are introducing legislation to extend and increase the subsidy.

Under bill S. 2730, proposed by Sens. Sherrod Brown (D-Ohio), and Bob Casey (D-Pa.), the nine-month subsidy would be extended by six months to 15 months, and the 65 percent federal premium subsidy would be raised to 75 percent.

In addition, workers who lose their jobs through June 30, 2010, would be eligible for the subsidy. Under the current law, employees who lose their jobs after Dec. 31 will not be eligible for the subsidy.

And due to an unusual way the current law is written, employees laid off before Dec. 31, but whose COBRA eligibility doesn’t begin until next year also would not be eligible for the subsidy. That could happen, for example, if an employee is laid off in mid-December and the individual’s former employer voluntarily extends group coverage through the end of the month.

. . . A somewhat similar bill was introduced in the House last month by Rep. Joe Sestak (D-Pa.). The Sestak bill, though, would keep the subsidy at 65 percent.

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