The health benefit provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA) now allow for new temporary premium reduction, for terminated employees. All such laid-off employees, who are enrolled in their employer's health plan but are finding it difficult to pay for COBRA, are entitled to a subsidy to help finance the cost of the health insurance, if they fulfill certain pre-conditions.

The subvention has been set at 35 percent of the eligible employees' COBRA payment, for up to a nine-month period. The remaining 65 percent of the payment would be paid by the employees, with the provision of recovering the thus paid money by seeking a credit on their quarterly federal employment tax return.

The main per-condition for availing the COBRA payment subsidy includes that the employee must be involuntarily laid-off from his job between September 1, 2008, and December 31, 2009. However, those employees who are eligible for other group health coverage or Medicare cannot seek the advantage of the premium reduction.

In addition, if a company has either been closed down or has gone bankrupt, with its group health plan going kaput, it employees cannot avail the COBRA subsidy.

Others who do not qualify for subsidy include individuals with modified adjusted gross income over $125,000; and taxpayers with modified adjusted gross income over $145,000.