| Millions of Americans have recently been faced | | | | during the recession are only required to pay 35 |
| with the task of finding their own affordable | | | | percent of their COBRA health insurance |
| healthcare plans for themselves and their families | | | | premiums, while the federal government pays the |
| after they have lost their jobs. Already in 2009 | | | | remaining 65 percent. This Act is adopted on a |
| alone, an estimated that 7 million Americans who | | | | state-by-state basis and has been an effective |
| lost their jobs as a result of the recession will | | | | short-term solution for millions of Americans. |
| have to pay COBRA health insurance premiums in | | | | However, the state COBRA coverage only lasts |
| order to maintain their health insurance plans. | | | | from six to nine months, depending on an |
| The good news for these millions of recently | | | | individual's state. Federal COBRA coverage lasts |
| unemployed workers is that a new government | | | | up to 18 months, in most cases. |
| Act - the American Recovery and Reinvestment | | | | For many Americans currently enrolled in COBRA |
| Act (ARRA) - has been put into place in many | | | | health insurance programs, COBRA and/or ARRA |
| states to help these individuals and their families | | | | financial support is about to expire. Americans |
| afford to pay for their COBRA healthcare. | | | | who are still unemployed are now challenged to |
| However, the ARRA and COBRA only provide | | | | find affordable healthcare plans for themselves |
| temporary financial relief and, for many, the | | | | and their families. It is especially important for |
| programs are about to end. Health Savings | | | | them to enroll in a new health insurance program |
| Accounts may be viable healthcare solutions for | | | | before their COBRA benefits expire so that they |
| these employees. | | | | will be able to maintain healthcare coverage at all |
| Working with COBRA | | | | times. |
| COBRA is a program that allows employees who | | | | Health Savings Account Options |
| have lost their jobs through no fault of their own | | | | For individuals who have lost their jobs, a Health |
| to continue with the same healthcare plans that | | | | Savings Account is generally a very affordable |
| they had been receiving through their employers. | | | | and effective health insurance solution. Health |
| The COBRA program is temporary and, while | | | | Savings Accounts are used by individuals in all |
| employees are able to maintain their same health | | | | industries and financial situations to save money, |
| insurance plans, employees do have to pay more | | | | including small business owners, businesses, |
| for the health insurance premiums on their | | | | unemployed individuals, families, financial-savvy |
| COBRA plans than they paid while they were | | | | employees, and more. |
| employed. | | | | A Health Savings Account is similar to an IRA in |
| Historically, COBRA premiums have been difficult | | | | that individuals set aside money into the health |
| for laid-off workers to afford on their own. Yet, | | | | savings account that they can then invest in high |
| because many workers were able to quickly find | | | | interest-yielding stocks, bonds, money markets, |
| reemployment after being laid off, many workers | | | | and more. The money that an individual puts into |
| chose to use the COBRA option as a temporary | | | | the health savings account is tax-deductible and |
| health insurance solution while they were between | | | | can grow tax-free. When an individual needs to |
| jobs. | | | | pay for a qualifying health-related expense, he or |
| However, with current challenging economic | | | | she can withdraw money from the health savings |
| conditions, it has not been possible for many | | | | account to pay for it without paying tax. |
| workers to find reemployment, which means that | | | | One of the many benefits of a Health Savings |
| they have had to pay high COBRA premiums for | | | | Account is that individuals can use the funds from |
| longer periods of time - or opt to forgo health | | | | their accounts as they wish. However, if they |
| insurance altogether. Therefore, while COBRA | | | | withdraw money for a non-healthcare related |
| programs have been an affective short-term | | | | expense, they will pay taxes on the funds that |
| solution to help workers get through a temporary | | | | they withdraw. When they leave funds in their |
| job loss, they are not able to provide affordable | | | | Health Savings Account, the money can grow |
| or long-term health insurance. | | | | completely tax-free for life. |
| American Recovery and Reinvestment Act | | | | In order to establish a Health Savings Account, |
| In order to help workers more easily afford | | | | individuals need to open a qualifying high-deductible |
| COBRA (and retain healthcare coverage) the | | | | health insurance account. Health Savings Accounts |
| federal government instated the American | | | | can be used by individuals and families. There are |
| Recovery and Reinvestment Act (ARRA), which | | | | also maximum annual contributions for individual |
| has been adopted by some states. | | | | and family Health Savings Accounts, which are |
| Under the ARRA, workers who lost their jobs | | | | subject to change every year. |