What is the difference between a direct subsidy and a whopping subsidy?

Is there some (legal) way I won't lose my COBRA premium subsidy?

• COBRA premium subsidy: I have it, will lose it because of a temporary job, and while I can suck it up and deal, is there something I am missing? So, I was unceremoniously and unexpectedly let go (not laid off) a couple of weeks ago after several years of highly praised service with the company. It sucks, but it's done and I'm just trying to move on to better things. I'm doing the whole COBRA thing, and am eligible for the AARA premium subsidy, which is a HUGE help. It means that rather than paying about $500/month, I pay about $175/month. When you haven't secured permanent employment, that can be a huge difference in your financial resources. A week after being given the boot, I was hired to work a temporary full-time job with a staffing agency. It brings in less than unemployment (about $100 a week after taxes), but in terms of my resume and future opportunities, the loss is well worth it. I know the staffing agency offers insurance, but it wasn't until I was poking around last night that I found out that if I work 125 hours in four consecutive weeks I am eligible for their HMO. Awesome, right? Unfortunately, no. My old company's insurance is superior to what they would be offering me, and I have regular meds and doctor visits to factor into my budget. If this were a permanent position, then fine, but it's not, and since I'm planning an out-of-state move, I won't be working for this staffing agency for much more than a couple of months, if that. So, I'll be sticking with COBRA, but as soon as I become eligible for a group health insurance plan, even if I do not enroll, I lose the subsidy. By working, I not only lose $400 a month, but I also will have to put out an extra $325/month for my insurance. While I think it's nuts that I am basically losing $725/month because I want to be productive rather than do a lackluster job search and collect unemployment, it's apparently the way things go. My question for you, my knowledgeable MeFites, is there something I am missing? Quitting the job is not an option, in part because a friend helped me snag the position, but also that feels wrong, would technically disqualify me for unemployment, and ruins a potentially good reference. I am thinking about floating the idea of somehow breaking the cycle of 125 hours in four weeks with the staffing agency, but I suspect that's a non-starter. Is there some loophole that I'm missing? Is my stressed out brain not thinking of a better solution? If you know about AARA, is there any flexibility when it comes to being offered another insurance plan via a temporary position? I do realize that I will be able to claim the premium as a deduction for my 2010 taxes, but there's the short-term vs. the long-term, and right now losing that subsidy seems like it would screw me up during both time-lines. Also, I am not willing to try to skate by and not report being eligible for the group insurance. I prefer doing things above-board for a number of reasons, and it simply is not an option. Still, is there something that just hasn't occurred to me yet? Much thanks for any and all help!

• Answer:

  AFAIK you can stay on COBRA for the duration, but you may be taxed on the difference between the subsidized COBRA and the cost of insurance offered by the new employer.