DOI News

For Immediate Release: Contact:
June 18, 2009 Kristin Milam
Johanna Royo
New N.C. Law Extends COBRA Enrollment Period for Unemployed Workers
Helps Laid-off Employees of Small Business Enroll in State's Version of COBRA, Receive Federal Subsidy
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced that Senate Bill 957 was signed into law by the Governor. The new law gives laid-off employees of small businesses -- fewer than 20 employees -- a longer period of time to enroll in North Carolina's version of the federal COBRA coverage, often called "mini-COBRA," which will ultimately allow them to receive the federal stimulus package's 65 percent COBRA premium subsidy.
"Because of this legislation and the federal premium subsidy, more North Carolinians who have been laid off will be able to maintain their insurance coverage," said Commissioner Goodwin. "We hear from a lot of consumers who unfortunately have chosen not to extend their coverage through COBRA or mini-COBRA because it is simply too expensive or they missed the election period."
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. Insurance companies of small employers - those who have fewer than 20 employees - are required to offer continuation coverage under North Carolina's Group Health Insurance Continuation laws.
The federal stimulus package contains two provisions that expand the benefits available to those employees who have been involuntarily terminated from their positions:
  • Extends the election period for eligible employees to determine whether or not they wish to enroll in the federal COBRA program. The signing of SB 957 into law provides the same extended election period for mini-COBRA in North Carolina.
  • Provides a subsidy that pays for 65 percent of the premium for both COBRA and mini-COBRA recipients who were involuntarily terminated from their positions 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.
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.
-- NCDOI --