Senate, Aubertine Approve Legislation to Cut COBRA Costs

Darrel J. Aubertine

ALBANY (March 19, 2009)—State Sen. Darrel J. Aubertine and his colleagues in the New York State Senate voted unanimously today to approve legislation that cuts the cost of health insurance for individuals between jobs because of the recent economic downturn.

The legislation (S.3068), sponsored by Senate Insurance Committee Chair Neil Breslin, provides a 65% discount on continuing health insurance coverage (COBRA) for recently unemployed New Yorkers, with funding provided entirely through federal stimulus funding. Assemblyman Joe Morelle sponsored the same legislation in the Assembly, where it was also passed unanimously. (Later Add: Gov. David A. Paterson signed the bill into law on March 20.)

“In the current economic climate with unemployment rising, it is critical that we help individuals and families maintain health insurance coverage as they look for new jobs,” Sen. Aubertine said. “With this legislation, we can assure families that they can retain health insurance coverage with an unprecedented 65 percent reduction in health care costs.”

Under the federal American Recovery and Reinvestment Tax Act of 2009 (ARRA), those facing job loss between September 1, 2008 and December 31, 2009 are eligible to maintain coverage at 65 percent of continuation premiums.

About 420,000 New York households are currently struggling with unemployment, up by 175,000 from just last year.  Continuing COBRA health coverage is available for these families, but it is often out of reach because of the cost.  This bill provides an immediate 65 percent discount – family coverage that might have been unaffordable at $1,000 per month will now cost just $350 per month, putting healthcare within the reach of thousands more struggling families.

“Throughout this country, the expense of COBRA eats up a large percentage of unemployment benefits and this should help address that in New York State,” Sen. Aubertine said. “This legislation helps the people who have been laid off over the past six months and the businesses that share this expense.”

The bill also expands availability to more businesses and workers.  The protections of the Federal COBRA program apply only to those companies with more than 20 employees. With today’s legislation, New York will extend the same reduced-rate available under the federal COBRA program to laid-off employees of smaller companies with employees of 19 or fewer.