State COBRA Expansions for Small Businesses

Updated December 2009

Under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), those with employer-sponsored insurance (at businesses with 20 or more employees) are entitled to temporarily continue, generally for 18 months, their coverage in the event that employment or dependent status changes for a reason other than termination due to gross misconduct. Beneficiaries are expected to pay the full premium (not to exceed 102 percent of the cost for similarly situated individuals in the group). According to FamiliesUSA, individual premium costs for COBRA average 30 percent of unemployment insurance benefits and family premiums average 84 percent of unemployment benefits. Due to this financial burden, only 18 to 26 percent of those eligible for COBRA benefits are estimated to use them.

State Roles: Forty states and the District of Columbia expand COBRA regulations to small businesses (2-19 employees), with varying duration and cost requirements. Massachusetts, through the Department of Unemployment Assistance, offers the Medical Security Program, which offers direct coverage or premium assistance of up to 80 percent of the premium towards continuation coverage, for those who meet income eligibility standards.

Federal Stimulus Law, 2009: On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA). Among many other provisions, the new law expands the federal COBRA Continuation Coverage to provide a 65 percent federal subsidy toward an eligible worker's COBRA premium for up to 9 months. This provision was effective as of February 16, 2009. The federal subsidy is available for federal COBRA continuation coverage and for mini-COBRA state continuation coverage programs providing comparable coverage. People who have lost their jobs between September 1, 2008 and December 31, 2009 and who have annual incomes of less than $125,000 (single) or $250,000 if married are eligible for the subsidy. An additional 60 day special election period is offered to those covered by federal COBRA provisions who did not elect COBRA coverage initially or have dropped coverage. States are allowed to extend this special election period for those eligible under mini-COBRA provisions, but it is not required. In addition to those states, listed below, who have enacted or have pending legislation to grant the special election period, Kentucky, New Hampshire, New Jersey and South Dakota have granted the special election period through administrative regulation.

State	State Mini-COBRA Expansion	Duration of Continuation Coverage (Months)	Premium Restriction (Percentage of Group Rate)
Alabama	No	NA	NA
Alaska	No	NA	NA
Arizona	No	NA	NA
Arkansas	Yes	4	100%
California	Yes	36	110%
Colorado	Yes	18	100%
Connecticut	Yes	36	102%
Delaware	No	NA	NA
District of Columbia	Yes	3	102%
Florida	Yes	18	115%
Georgia	Yes	9	100%
Hawaii	No	3 (disability only)	NA
Idaho	No	NA	NA
Illinois	Yes	12	100%
Indiana	No	NA	NA
Iowa	Yes	9	100%
Kansas	Yes	18	100%
Kentucky	Yes	18	100%
Louisiana	Yes	12	100%
Maine	Yes	12	102%
Maryland	Yes	18	102%
Massachusetts	Yes	36	102%
Michigan	No	NA	NA
Minnesota	Yes	18 (36 for dependents)	102%
Mississippi	Yes	12	100%
Missouri	Yes	9	100%
Montana	No	NA	NA
Nebraska	Yes	6 (12 if coverage is lost due to death)	102%
Nevada	Yes	18 (36 for dependents)	110%
New Hampshire	Yes	36	102%
New Jersey	Yes	36	102%
New Mexico	Yes	6	100%
New York	Yes	36	102%
North Carolina	Yes	18	102%
North Dakota	Yes	36	100%
Ohio	Yes	12	100%
Oklahoma	Yes	4 (up to 6 with disability)	100%
Oregon	Yes	9	100%
Pennsylvania	Yes	9	105%
Rhode Island	Yes	18	100%
South Carolina	Yes	6	100%
South Dakota	Yes	36	102%
Tennessee	Yes	15	100%
Texas	Yes	9	102%
Utah	Yes	12	102%
Vermont	Yes	18	102%
Virginia	Yes	9	102%
Washington	No	NA	NA
West Virginia	Yes	18	100%
Wisconsin	Yes	18	100%
Wyoming	Yes	12	102%

Source: Kaiser Family Foundation 2007 and NCSL 2009.
NA= Not Applicable

Current Legislation

Bill Information	Summary
California A 23 Enacted	Requires insurers to notify those eligible for COBRA premium assistance under ARRA of their right to elect COBRA within 60 days of notice. Those who had previously chosen not to elect COBRA coverage can withdraw their rejection of COBRA coverage.
California AJR 28	Would urge Congress to extend COBRA premium subsidy.
California S 727	Would require insurers to provide COBRA-like coverage to those enrolled in an employer group plan that an employer eliminates without offering a replacement.
California S 796	Would allow individuals to qualify as federally eligible under HIPPA without electing and exhausting COBRA option.
Colorado H 1349 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Connecticut H 6715 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Georgia S 182 Carryover	Would expand COBRA coverage for employers with 2 to 50 employees from three months to 18 months. Depending on eligibility, up to a further 36 months of eligibility may be granted.
Georgia S 94 Enacted	Expands COBRA duration to 9 months for those eligible for premium assistance under ARRA. Grants a second election period for 60 days from receiving notice of eligibility for those who previously refused COBRA coverage.
Illinois H 2325 Enacted	Grants a second election period for those eligible for premium assistance who had previously refused mini-COBRA coverage. Extends mini-COBRA duration from nine to 12 months.
Illinois H 3847	Would cap COBRA premium payment at 25% of unemployment benefits for those eligible for both COBRA and unemployment. The state would pay the remainder of COBRA premium.
Kansas H 2027 Enacted	Grants a second election period for those eligible for premium assistance who had previously refused mini-COBRA coverage.
Maine H 821 Enacted	Would grant a second election period for those eligible for premium assistance who had previously refused mini-COBRA coverage.
Maryland S 84 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Massachusetts S 2061 Enacted	Would grant a second election period for those eligible for premium assistance who had previously refused mini-COBRA coverage.
Michigan H 4436	Would allocate $5 million to provide COBRA subsidies to those also eligible for ARRA premium assistance, paying half of the remaining premium.
Minnesota H 42/S 347 Carryover	Would provide a new election period for those who previously declined to elect COBRA coverage who are eligible for ARRA premium assistance. Minnesota provides further premium assistance of 25 percent to those eligible for ARRA assistance. It would also extend temporary (145 days) MinnesotaCare coverage to those that are unemployed, not eligible for continuation coverage or other programs, and are below 275 percent of the federal poverty guidelines. Private insurers must provide guaranteed issue for these individuals when temporary coverage ceases.
Minnesota H 1362 Enacted	Provides an additional 35 percent subsidy to those eligible for ARRA premium assistance who elect COBRA coverage and would otherwise be eligible for a state health program.
Minnesota S 1904 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Missouri S 415 Failed	Would have allowed those who are age 55 or older when exhausting federally mandated COBRA coverage to maintain continuation coverage until they are eligible for Medicare.
Nevada A 546 Enacted	Grants a second election period for premium assistance to those who had previously refused mini-COBRA coverage. Changes premium restriction to 110 percent of group rate.
New York A 6740 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
North Carolina S 957 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Oklahoma S 553 Enacted	Extends standard mini-COBRA duration from 30 to 63 days. Grants mini-COBRA coverage for 4 months to those eligible for ARRA premium assistance.
Ohio H 2 Enacted	Increased mini-COBRA coverage from 6 to 12 months.
Oregon H 2433 Enacted	Expands mini-COBRA coverage duration to 9 months through 2011 to allow full utilization of ARRA premium assistance.
Pennsylvania H 1089 Enacted	Would create mini-COBRA coverage for 9 months with a maximum premium of 105 percent of the group rate. Does not grant eligibility to those whose qualifying event occurred prior to enactment.
Pennsylvania S 442	Would create mini-COBRA coverage for 9 months with a maximum premium of 105 percent of the group rate.
Rhode Island H 6099/S 843 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Texas S 1771 Enacted	Would expand mini-COBRA coverage from 6 to 9 months and allow those eligible for ARRA premium assistance who previously declined to elect COBRA coverage to do so within 60 days of notification. Also provides six month extension of coverage to those who qualify for COBRA under federal law.
Utah H 178 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
Utah H 188 Enacted	Creates the NetCare Plan, a mandate-free, low-cost alternative to traditional COBRA continuation coverage. Extends mini-COBRA coverage to 12 months.
Vermont H 444 Enacted	Extends mini-COBRA provision to 18 months of coverage and increases the allowed premium to 102 percent of the group rate.
Virginia H 2024 Enacted	Creates mini-COBRA provision, granting continuation coverage to employees of small employers (2 to 19 employees) up to 9 months, with an allowed premium of up to 102 percent of the group rate. Election eligibility applies retroactively to those involuntarily terminated on or after September 1, 2008.
West Virginia S 552 Enacted	Grants a second election period for 60 days from receiving notice of eligibility for premium assistance to those who had previously refused mini-COBRA coverage.
District of Columbia B 159/B 160 Enacted	Temporarily extends mini-COBRA for duration of eligibility for ARRA premium subsidy.
District of Columbia R 284 Adopted	Extends emergency act implementing mini-COBRA extension while Congressional review is pending.

Source: StateNet and FamiliesUSA, 2009.