DOI News

For Immediate Release: Contact:
Aprril 1, 2009 Kristin Milam
Johanna Royo
919-807-6011
 
Proposed Legislation Extends COBRA Coverage for Unemployed Workers
 
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced his support of Senate Bill 957, which qualifies laid-off employees of small businesses for federal benefits that extends the enrollment period of and helps pay for COBRA health insurance coverage.
 
"I want to thank Senator Nesbitt for working with the Department of Insurance on this important piece of legislation, and sponsoring it on behalf of our agency," said Commissioner Goodwin. "Now more than ever, it's imperative that the state does its part in making sure North Carolinians are getting as many of the benefits found in the federal stimulus package as possible."
 
COBRA gives workers and their families the option to continue group health benefits provided by their group health plans for limited periods of time under certain circumstances. Under federal law, COBRA generally applies to employers with 20 or more employees, and workers may be charged up to 102 percent of the full health insurance premium. Smaller employers - those who have fewer than 20 employees - are required to offer the same continuation coverage under North Carolina's Group Health Insurance Continuation laws, often called "mini-COBRA."
 
The federal stimulus package contains two provisions that expand the benefits available to those employees who have been involuntarily terminated from their positions:
 
  • Provides a subsidy that pays for 65 percent of the premium for both COBRA and mini-COBRA recipients who enroll from Sept. 1, 2008 to Dec. 31, 2009. Depending on the size of the former employer, either the employer or the insurance provider fronts 65 percent of the premium amount and then recoups that expense through federal payroll tax credits. Workers are responsible for the remaining 35 percent of the premium.
  • Extends the election period for eligible employees to determine whether or not they wish to enroll in the federal COBRA program. The federal stimulus package does not mandate an extended election period for mini-COBRA plans; however, if SB 957 passes, it will extend the mini-COBRA election period in North Carolina.
Unemployed workers who are eligible for the stimulus-related benefits will be notified by their former employer's group health insurance provider.
 
Consumers who have general questions about COBRA benefits or other insurance questions, may call the N.C. Department of Insurance at 800-546-5664. For specific questions about COBRA subsidies, enrollment periods, employer payroll tax credits or other technical information, consumers and employers may contact the U.S. Department of Labor at 866-444-3272 or the Internal Revenue Service at 800-829-4933.
 
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