Saturday, June 8, 2013

Subsidizing Layoffs

I noticed this in an Urban Institute report:

Some large‐firm interviewees reported that before ARRA they provided some amount of free or reduced cost COBRA coverage for laid‐off workers, based upon the prior duration of employment. ...Several of these companies reported that they reduced or dropped this prior benefit in reaction to ARRA.

In other words, these employers normally were paying for health insurance for workers they laid off, but for a while (from April 2009 to May 2010) the ARRA picked up the tab. This is yet another reason why laying people off during the recession was cheaper than layoffs normally are.

No comments: