COBRA Control Services, LLC

STACK: IMPROVED MINI-COBRA LEGISLATION PASSES SENATE Stack HARRISBURG, April 1 – The Pennsylvania Senate today unanimously approved legislation that includes state Sen. Mike Stack’s amendment to give employees of small businesses who were laid off access to federal COBRA subsidies.

Stack authored an amendment, approved by the full Senate on Tuesday, clarifying that recipients of mini-COBRA health insurance may also have access to premium assistance provided through the American Recovery and Reinvestment Act of 2009 to purchase COBRA health insurance benefits.

“Hopefully, this window of coverage will provide working people with enough time to get back on their feet, find a new job and hopefully obtain affordable health insurance benefits,” Stack said. “Regardless of the circumstances, everyone should have access to affordable health care, and this legislation will help those who lose their job and health coverage.”

The senator worked closely on the amendment with state Sen. Don White (R-Armstrong, Butler, Clearfield, Indiana, Westmoreland), the author of the legislation (Senate Bill 442) and the Republican chairman of the Senate Banking and Insurance Committee. Stack is the Democratic chairman.

In order to access the federal subsidy, the state mini-COBRA program needed to be substantially similar to the federal COBRA plan. Senate Bill 442 would ensure the mini-COBRA program mirrors the federal program to help former employees access the federal subsidy.

The Obama administration’s economic stimulus plan has allocated funding to help the unemployed manage their health care costs by enabling displaced workers the opportunity to purchase health care benefits at a discounted rate through COBRA.

The federal subsidy would last up to nine months, but could end earlier if the employee fails to pay premiums or finds other health insurance coverage.

In order to utilize COBRA, employees must have been insured under their company’s group policy for three months prior to the termination of coverage. Continuation of coverage would not apply to someone who is eligible for coverage under Medicare; someone who fails to verify ineligibility for other employer-based group health insurance; someone who is covered by a spouse or dependents health insurance.

The bill also provides eligibility for employees terminated after the bill’s effective date and before January 1, 2010 to receive federal stimulus COBRA premium assistance.