DOI News

For Immediate Release: Contacts:
January 5, 2010 Kristin Milam
Johanna Royo
Federal COBRA Subsidy Extended by Six Months
Laid-off workers now will receive a total of 15 months of COBRA subsidy
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced that the federal subsidy program for COBRA coverage for involuntarily terminated workers has been extended. The extension allows the subsidy to remain in effect for an additional six months, for a total of 15 months worth of subsidy payments. The subsidy pays for 65 percent of the premium for both COBRA and mini-COBRA (see below for mini-COBRA definition) recipients who are involuntarily terminated from their jobs between Sept. 1, 2008 to Feb 28, 2010; workers are responsible for paying the remaining 35 percent.
Under the new extension, workers who had exhausted the initial subsidy and subsequently canceled their COBRA coverage because they couldn't afford the premiums without the subsidy, may re-enroll and receive the extended subsidy. To reinstate their coverage, these workers must pay the 35 percent of the premium for the time period that they would have been covered if they hadn't canceled. They must pay the 35 percent of premium costs by Feb. 17, 2010, or, if later, 30 days after notice of the extension is provided by their plan administrator.
Workers who lost their subsidy and paid the full 100 percent premium in December 2009 should contact their plan administrator or employer sponsoring the plan to discuss a credit for future months of coverage or a reimbursement of the overpayment.
"The COBRA subsidy extension is great news for North Carolinians who have been laid off and couldn't continue their health insurance because of the often impossibly expensive premiums," said Commissioner Goodwin. "Many citizens in our state were approaching the subsidy's original cutoff date and just didn't know how they could pay for the full coverage premiums-or worse, they were forced to cancel their coverage once the subsidy ran out. I'm so pleased that these folks will have the opportunity to maintain their coverage."
Initially, the federal stimulus bill extended the enrollment period for COBRA coverage and offered a subsidy that paid for 65 percent of a worker's COBRA or mini-COBRA coverage for nine months of continuation coverage.
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. Employees who work for smaller employers - those with fewer than 20 employees - are also eligible for the same continuation coverage under North Carolina's Group Health Insurance Continuation laws, often called "mini-COBRA."
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 an EBSA Benefits Advisor toll free at 866-444-3272 or visit their Web site by click on this link.
-- NCDOI --