WASHINGTON -- Santa couldn't have done better.

Millions of Americans got a great gift when Congress passed and President Obama signed a defense spending bill that included a provision to extend a subsidy helping those out of work continue their health insurance coverage.

Last February, Congress established the subsidy under the Consolidated Omnibus Budget Reconciliation Act, commonly referred to as COBRA.

Under COBRA, former employees receive health coverage at their employer group rates. But they have to pay the full premium, including the share that the employer used to pay plus a 2 percent administrative fee.

Understandably, many who become unemployed cannot afford the premium, which on average can consume 83 percent of their unemployment income, according to a report by Families USA.

Laid-off workers first became eligible for the subsidy in March. Those who take advantage of the program pay 35 percent of the COBRA premium, and employers pick up the remaining 65 percent, which is then reimbursed by the government through a payroll tax credit.

Because the subsidy was only to last nine months, the first eligible group was cut off at the end of November. Others who were facing losing the subsidy at the end of the year became stressed at the prospect of unaffordable monthly payments.

"How can we, as unemployed American citizens, pay those ridiculous premiums?" asked Jeff Krebs of Reynoldsburg, Ohio, in an e-mail to me.

Krebs and his wife Marianne are both unemployed. Jeff lost his job 16 months ago and his wife lost hers in April after 25 years with the same company. Thanks to the COBRA subsidy, their health insurance premium was $450 a month.

But without an extension, the Krebs were facing a jump in their premium to $1,550 by the new year.

"This is like winning the lottery for us, especially right before Christmas," Krebs said. "You do not understand what a relief that has just been lifted off our shoulders."

I do understand. I hear often from so many laid-off workers struggling financially to keep health coverage.

The COBRA subsidy program extension included in the 2010 Department of Defense Appropriations Act will do the following:

-- Expand the amount of time people can qualify for the subsidy from nine months to 15 months.

-- Extend the eligibility period for the COBRA premium reduction an additional two months. Before the extension, you had to have been involuntarily separated from your job between Sept. 1, 2008, and Dec. 31, 2009, in order to qualify for the reduced COBRA payment. That period of eligibility has now been stretched out to Feb. 28, 2010.