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Office of the Assistant Secretary for Policy (OASP)

Evaluation of the ARRA COBRA Premium Subsidy


The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers at firms with 20 or more employees and their families the right to choose to continue group health benefits provided by their group health plan for limited periods of time when they lose coverage under certain circumstances, such as job loss, transition between jobs or a reduction in hours worked. The American Recovery and Reinvestment Act of 2009 (ARRA) expanded eligibility for COBRA and provided for temporary premium reductions for health benefits for certain individuals. Eligible individuals paid only 35 percent of their COBRA premiums and the remaining 65 percent was reimbursed to the coverage provider through a tax credit. As the IRS processes payroll tax data, they will report on the number of policy holders who took the subsidy. While this data will be useful for detailing the cost of the subsidy, it will not address the subsidy's impact on the propensity of unemployed workers to maintain health insurance coverage. Therefore, the objective of this evaluation is to understand how the ARRA subsidies changed individual's COBRA utilization. The contractor is designing and implementing a sampling frame and strategy entailing stratified random sampling that will produce nationally representative information about all potential COBRA recipients. The sample will be sufficiently large to both provide precise estimates of the COBRA take up rate in general and sufficiently precise estimates to statistically compare the take-up rates that occurred when the ARRA subsidy was and was not in place.


The goals of the evaluation include:

  1. What were the considerations of COBRA-eligible individuals in their decision to use or not use COBRA?
  2. What are the characteristics of COBRA-eligible individuals and the characteristics of those that received the COBRA subsidy?
  3. Were the COBRA-eligible individuals aware of their right to continue coverage? Were they aware of the availability of subsidies?
  4. How many unemployed workers were able to maintain insurance coverage during their period of unemployment?
  5. How did the availability of the ARRA subsidy for COBRA premiums affect the take-up and duration of COBRA coverage? How many of the people who took up the subsidy would have been uninsured in the absence of the subsidy?
  6. Did the unemployed worker utilize other programs designed to aid unemployed workers?


The primary tasks of the evaluation include:

  1. Designing a sample methodology and survey questions.
  2. Producing and acquiring Office of Management and Budget Paperwork Reduction Act for a survey.
  3. Generating an appropriate sample and conducting a survey.
  4. Compiling and analyzing obtained data.
  5. Writing an interim and final report including an abstract and one-page summary of each.
  6. Preparing data and documentation for a public use data file.

Key Information

The overall budget for the evaluation is $3,500,000.00. The evaluation contractor is Mathematica. For more information on this evaluation please contact Jonathan Simonetta at