Thousands of unemployed workers won't have to worry about starting the new year without health insurance.

President Obama has signed legislation that will allow laid-off workers to receive subsidized COBRA premiums for up to 15 months. Previously, the subsidy expired after nine months.

The extension, included in a defense spending bill approved by Congress over the weekend, also extended the cutoff for eligibility for the COBRA subsidy to Feb. 28, 2010, from Dec. 31.

COBRA is a federal law that allows workers who leave their jobs to continue their former employer's health insurance coverage for up to 18 months. Ordinarily, though, individuals must pay the entire premium, plus an administrative fee, making COBRA unaffordable for most unemployed workers.

The economic stimulus package enacted in February subsidized 65 percent of COBRA premiums for workers laid off between Sept. 1, 2008, and Dec. 31.

That allowed the average family to continue health care coverage for $389 a month, versus more than $1,100 a month without the subsidy, according to Families USA, a health care advocacy group.

The subsidy led to a sharp rise in the number of people who opted to continue their former employer's coverage. From March through June, COBRA enrollment doubled, according to Hewitt Associates.

With unemployment at a 25-year high, more than 14 million are eligible for subsidized COBRA, according to Hewitt.

But unemployed workers who signed up in March lost their subsidy on Dec. 1, and thousands more were facing the end of subsidized premiums within the next few weeks.

Individuals whose subsidy had expired will have an opportunity to continue their COBRA coverage as long as they pay 35 percent of the premium, said Phyllis Borzi, assistant secretary of the Employee Benefits Security Administration.