Experts say employers should brace for another extension of the federal subsidy of COBRA health insurance premiums for involuntarily terminated employees, with the president and top Senate Democrats adding their support.

The Obama administration included the extension in its proposed fiscal 2011 budget, which it sent to lawmakers last week.

In Congress, key lawmakers also are backing an extension. Senate Majority Leader Harry Reid (D-Nev.), and Finance Committee Chairman Max Baucus (D-Mont.), and several other top Senate Democrats last week distributed a description of a soon-to-be-introduced jobs bill that would include extending the COBRA subsidy, but provided no specific details. One proposal under discussion, sources said, would extend the subsidy another three months so employees laid off in March, April and May would be eligible.

Under the extension proposed by the administration, employees laid off from March 1 through Dec. 31 this year would be eligible for the 65 percent subsidy for up to 12 months.

. . . Driven by administration and congressional support, along with the nation's continuing high unemployment rate, another COBRA subsidy extension is almost certain, Washington observers say. . . . “There is huge public pressure on legislators” to pass another extension, said Kathryn Wilber of the American Benefits Council in Washington.

. . . The availability of the subsidy has sent COBRA opt-in rates soaring. In a survey of 200 large employers, Hewitt Associates found that the percentage of laid-off employees opting for COBRA more than doubled to 39 percent from March 1, 2009, when the subsidy generally first became available, through Nov. 30, 2009. In contrast, from Sept. 1, 2008, through Feb. 28, 2009, an average of 19 percent of involuntarily terminated employees opted for COBRA.

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