Senate Approves Bill To Extend COBRA Benefits To More Unemployed

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TRENTON – The full Senate unanimously approved legislation that would offer extended health benefits to residents left jobless as a result of their place of employment closing.

The bill (S-956) would allow certain employees who are laid off due to a workplace closure to continue receiving employer-sponsored health benefits for up to 18 months, under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Those individuals – required to purchase the coverage – could then take advantage of reduced insurance premiums, made possible through subsidies provided under the federal economic stimulus.


Under current state law, COBRA benefits are available only to unemployed residents whose former place of employment continues to offer a group health plan. This effectively blocks unemployed residents whose employer has gone out of business from receiving continuation benefits, also making them ineligible for reduced premiums first provided under the American Recovery and Reinvestment Act of 2009 (ARRA). Federal law allows eligible recipients to pay just 35 percent of their COBRA premiums; the other 65 percent is reimbursed to the provider through a tax credit.

The federal subsidy expires May 31, 2010, but has been extended multiple times and will likely be extended again. This measure would remain effective only as long as the federal premium assistance for continuation coverage is provided. It would apply retroactively, to residents whose employer ceased operations on or after October 1, 2009.

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