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Unemployment Benefit Provisions in the 2009 Economic Stimulus Plan

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The 2009 economic stimulus recovery plan calls for a host of benefits for states, taxpayers, companies, and certain industries. In addition to personal tax breaks in the 2009 economic stimulus plan, you may be able to receive additional benefits if you received unemployment benefits of signed up for COBRA insurance coverage after a certain date.

Unemployment and COBRA benefit provisions in the 2009 economic stimulus plan

The unemployment level in the US has increased in recent months and the US government has stepped up the benefits unemployed workers are eligible for. There are a few changes of note:

Longer unemployment benefits. The bill calls for an additional 20 weeks of normal unemployment benefits, plus up to 13 additional weeks on top of the 20 extra weeks for unemployment filers who live in a “high unemployment state.”  There are currently 30 states that qualify under the “high unemployment” label. Be sure to check with your state’s employment bureau for more information about your state.

Increased unemployment payments. The average weekly unemployment benefit in the US is around $300. The 2009 stimulus bill will temporarily increase payments by $25 across the board.

Tax exemption of some unemployment benefits. Unemployment benefits are considered taxable income. The new economic stimulus bill is calling for the first $2,400 of unemployment benefits paid in 2009 to be exempt from federal income taxes.

Health insurance help for the jobless. Another provision of the 2009 economic stimulus bill assists eligible jobless workers to pay for health insurance under COBRA. COBRA Health Insurance coverage gives newly unemployed workers the opportunity to continue receiving the same health insurance that was provided by their former employers – however, the newly unemployed workers must pay the entire cost out of pocket and they are only eligible to receive these benefits for a set period of time.

COBRA Insurance subsidies

As part of this stimulus bill, the government will subsidize 65% of the COBRA premiums for workers who were laid off between Sept. 1, 2008, and Dec. 31, 2009.

Who is eligible for the COBRA subsidy? The subsidy is limited to tax payers whose income is less than $125,000 for individuals or $250,000 for couples, and is good for up to 9 months of coverage. The bill will also extend the window of opportunity to sign up for COBRA coverage by 60 days for workers who were laid off between Sept. 1, 2008, and the day the stimulus law goes into effect.

How do you receive the COBRA subsidy? Employers pay for the subsidy out of their operating expenses, then file for reimbursement from the government. You will need to contact your former HR department for more information. Be patient with them if they do not have all the information readily handy – this is new for them too!

Additional benefits. The bill also gives states additional funding to increase the level of Medicaid availability for workers who cannot afford health care or who cannot sign up for COBRA Coverage because their former employer did not offer a health care plan.

For more information please visit the Department of Labor:

Best of luck to everyone who is searching for new work.


Published or updated December 29, 2011.
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