Californians Laid Off from Small Businesses May Be Eligible for COBRA Subsidy

Californians Laid Off from Small Businesses May Be Eligible for COBRA Subsidy

Last Thursday, the California Assembly voted unanimously to pass a bill AB 23 that amends state law to allow workers at firms with fewer than 20 employees to qualify for the federal subsidy for COBRA coverage.

The legislation applies to the Cal-COBRA program, which facilitates coverage for workers laid off from firms with no more than 19 employees.  It also would require health plans to alert people to the availability of the subsidy.

Currently, the federal subsidy, which was enacted through the economic stimulus package, applies only to people eligible for COBRA who had worked for employers with 20 or more employees. If passed, under this new bill by Democratic Assemblyman Dave Jones, California workers laid off between Sept. 1, 2008, and Dec. 31, 2009, will be able to receive the 65% federal subsidy for up to 9 months to keep their private health insurance through the Cal-COBRA program.

The Assembly Appropriations Committee estimates that the bill will make 60,000 to 100,000 unemployed Californians and their families eligible for the federal subsidy, accounting for about $400 million from the stimulus package.

Now going to the Senate for consideration, the legislation will become effective immediately if passed.

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Karen Fletcher
Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.