3 Ways the Stimulus Package Would Help Laid-Off Workers

The House passed a bill that aims to extend COBRA coverage and create new jobs

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Thousands of Americans lost their jobs this week. Major U.S. companies announced the elimination of at least 70,000 jobs, adding to the more than 2.6 million jobs the economy has lost over the past year. The U.S. House of Representatives passed a bill yesterday that would create new jobs and help some of those who lost them find and pay for health insurance. Here are 3 ways the new legislation could help recently laid-off workers.

Partially subsidized COBRA coverage. Employers are currently required to offer COBRA continuation health coverage for up to 18 months when you leave your job. But former employees must pay the entire cost of the insurance plus a 2 percent administrative fee. Many workers eligible for COBRA never take advantage of this health coverage through their former employer because the premium cost is too high. The American Recovery and Reinvestment Act says that workers who lost or lose their job between September 1, 2008 and December 31, 2009 as a result of the economic downturn would be eligible to receive a 65 percent subsidy towards their COBRA premium for up to 12 months. The Congressional Budget Office estimates that this package will help over 8.5 million people keep health care coverage for themselves and their families.

[See 7 Ways Laid-Off Baby Boomers Can Find Health Insurance]

COBRA extension for older workers. When COBRA coverage runs out, older workers often have difficultly finding new health insurance because of preexisting conditions or steep premiums that make individual coverage unaffordable. Employees laid off from their jobs in middle age or later often talk about making it to Medicare, in many cases hoping that they won’t become sick or injured until they reach their 65th birthday and qualify for government health insurance. Under the new legislation, workers age 55 and older and those who have worked for their employer for 10 or more years would be able to retain their COBRA coverage until they become Medicare-eligible or secure coverage through a new employer.

[See 5 Ways to Protect Your 401(k) if You're Laid Off]

Job Creation. The stimulus aims to create and maintain steady jobs. Sectors worth a look during your job search that would receive significant funds are:

Construction. Approximately $20 billion would go to modernize schools and colleges, including facility repairs, updating technology, and making facilities more energy-efficient.

Education. Some $79 billion goes to a state stabilization fund to help prevent education-related layoffs for teachers, classroom aides, and school meal providers. An additional $2.1 billion would go to Head Start and Early Head Start, creating jobs for early educators and transportation and nutrition providers.

Public service. State and local governments would get $25 billion for public safety, health, and other public services.

Green jobs. Dislocated workers willing to train for green jobs, including retrofitting buildings, green construction, and production of renewable energy, will get $4 billion.

[Check out The 10 Best Cities for Job-Seeking Retirees]

Tell us, will these provisions do enough to help laid-off workers get back on their feet?