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Spencer's Benefits Reports COBRA Survey Finds Recession Takes Hold: More Were Eligible, Fewer Signed Up, Costs Stay High
Date:6/10/2009

RIVERWOODS, Ill., June 10 /PRNewswire/ -- As more and more employees become eligible for COBRA continuing health coverage due to layoffs, a smaller and smaller percentage of them are actually signing up for it due to its high cost, according to the findings of the Spencer's Benefits Reports 2009 COBRA Survey. While 16.87 percent of employees became eligible for COBRA in the 2008 plan year at companies covered by the survey, only 9.69 percent of those eligible actually signed up for coverage. Spencer's Benefits Reports, a research service for employee benefits plan administrators is produced by Wolters Kluwer Law & Business, a leading provider of research information and software solutions for legal, business compliance and human resources professionals (hr.cch.com).

"This is the highest percentage of employees becoming eligible and the lowest rate of election for COBRA coverage since Spencer's first conducted a COBRA survey in 1989, but something we might expect given the severity of current economic conditions," explained Stephen A. Huth, managing editor, Spencer's Benefits Reports. "The 2009 survey will provide a baseline of COBRA experience at the height of a recession but before the temporary 65-percent COBRA subsidy in the American Recovery and Reinvestment Act took effect."

This is the 16th survey of COBRA coverage Spencer's has conducted since the 1986 enactment of the Consolidated Omnibus Budget Reconciliation Act (COBRA), which provides workers and their families who lose their health benefits due to certain circumstances the right to choose to continue group health benefits provided by their group health plan for limited periods of time. Qualified individuals may be required to pay the entire premium for coverage, plus up to 2 percent more for administrative costs.

COBRA costs in the 2009 survey avera
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SOURCE Wolters Kluwer Law & Business
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