Â Assembly Speaker Karen Bass (D-Los Angeles) applauded a bipartisan 74-0 vote in the California Assembly to pass AB 23, authored by Assemblymember Dave Jones (D-Sacramento), Chair of the Assembly Health Committee to ensure Californians who lose their job while working for a small employer, through a layoff or other involuntarily termination, are notified they may be eligible for a subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA) to help them pay for and keep their COBRA coverage.Â For those who lost jobs going back to September 2008, AB 23 would give them a second chance to continue coverage under California’s mini-COBRA law, Cal-COBRA, now that the subsidy is available. The bill was supported by Assemblymember Nathan Fletcher (R-San Diego), Vice-Chair of the Assembly Health Committee.
“Across the aisle cooperation to pass AB 23 will help more Californians afford COBRA coverage,” Bass said. “Losing your job means losing your health insurance for most Californians, and the 65% premium subsidy in the President’s stimulus plan means more Californians can maintain their coverage.”
“California has one of the highest unemployment rates and highest uninsured rates in the country,” Jones explained. “Hard working families who have lost their jobs during this economic crisis need assistance from the federal government to hold on to their health insurance.Â The quick passage of this bill is critical in order to meet the health care needs of California families.”
COBRA is a federal law which allows individuals under certain circumstances to continue employer group health benefits that might otherwise end because they leave employment, get divorced from the employed spouse, etc. Coverage under COBRA offers the same benefits as the employer plan, but individuals have to pay the entire premium on their own without payments by the employer.Â The federal law applies to employers with at least 20 employees, and California has a state law, Cal-COBRA, which applies to employers with 2 to 19 employees.
ARRA provides premium assistance for health benefits under federal COBRA and state mini-COBRA laws, such as Cal-COBRA, for individuals involuntarily terminated between September 1, 2008 and December 31, 2009.Â Eligible individuals would pay 35% of the COBRA/Cal-COBRA premium, and the federal subsidy would take care of the remaining 65%.Â The federal premium assistance applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.Â
ARRA allows individuals involuntarily terminated from September 1, 2008 through February 16, 2009 who did not elect COBRA when it was first offered, or who elected COBRA but who are no longer enrolled (for example, because they were unable to continue paying the premium) to haveÂ another “second chance” to elect COBRA coverage now that assistance is available. However, ARRA does not give the same second chance to Cal-COBRA eligible individuals. AB 23 would require notification of Cal-COBRA eligible individuals who were involuntarily terminated (including individuals who were involuntarily terminated going back to September 1, 2008) of their ability to get the subsidy and would establish a second-chance opportunity for employees of small firms to elect Cal-COBRA and get the premium assistance.