Does Your State Have a Mini-COBRA Plan and Subsidy Coverage for Everyone?

More COBRA Coverage Essentials

COBRA Subsidy Update and States “Mini-COBRAS”

Unemployment alone is paralyzing, much less the exit conversation you need to have with your company’s HR representative, which includes the perennial “Will you be using COBRA?” question. Cobra: exotic deadly snake…strikes without warning. Who EVER thought this was a great name for a health insurance initiative?

What COBRA is and What it is Not

COBRA is an acronym, albeit lousy one, for Consolidated Omnibus Budget Reconciliation Act. Leave it to the Federal Government to devise such a name. As notoriously expensive as COBRA is, it does offer you a temporary means to maintain your family’s current healthcare coverage while you shop for more affordable individual and/or family plans.

Myth:

COBRA is an insurance provider or company.

Truth:

COBRA is a government initiative added onto a number of federal Acts, including the Employee Retirement Income Security Act and the Public Health Service Act.

Update on the Federal COBRA Subsidy

President Obama promised to provide immediate relief to the American people. His American Recovery and Reinvention Act signed into law on February 17, 2009 provides a number of strategies, one a provision to cover 65% of the monthly COBRA premium cost for qualified unemployed Americans and their dependents. Yes, federal government to pick up 65% of your monthly COBRA bill. That leaves you with 35% to pay each month. This subsidy is good for 9 months.

Under normal circumstances few people have the resources necessary to elect to continue COBRA coverage, especially when the jobless outlook is so grim. So you can understand why the new COBRA health insurance subsidies are popular topics.

But for some people COBRA coverage may still be out of reach.

State Mini-COBRA Programs

Not all states have access to the same level of COBRA insurance benefits as others.

Remember, under the federal COBRA rules you may qualify for coverage if your employer’s group health insurance plan covered 20 or more employees. All but 11 states considered that an incomplete program that unfairly disenfranchises displaced employees from small businesses that employed and insured fewer than 20 employees.

A mini-COBRA is the continuation of coverage clause that most states have built into their laws. State mini-COBRA terms can differ quite significantly from those provided by the standard federal COBRA, so make sure you examine closely the coverage terms and eligibility rules of your state’s Mini-COBRA program.

States without a formal Mini COBRA include: Alabama, Alaska, Arizona, Delaware, Idaho, Indiana, Michigan, Montana, Pennsylvania, Virginia, and Washington.

Recommended Resources:

U.S. Department of Labor COBRA Continuation Program

U.S. Department of Labor COBRA Continuation Act under the American Recovery and Reinvestment Act of 2009