9. Tax-free assistance paying COBRA premiums
If you are laid off from a job where you received employer-provided health insurance, a federal law known as COBRA has allowed you to continue your health insurance coverage so long as you paid the full premium, plus any administrative fees. Starting in 2009, the federal government subsidizes 65 percent of COBRA premiums for employees who are laid off between Sept. 1, 2008, and Feb. 28, 2010. The assistance program is available for 15 months. The subsidy is in effect for any premium for a period of coverage beginning on or after Feb. 17, 2009.
The subsidy's tax-free element is reduced for singles with modified adjusted gross income, or AGI, between $125,000 and $145,000, and joint filers with modified AGI between $250,000 and $290,000. For singles with modified AGI above $145,000 and joint filers with modified AGI above $290,000, the subsidy is treated as gross income.