Employers Prepare To Carry Out Extension of COBRA Health Benefits

Employers in California and across the country are gearing up to comply with a six-month extension of subsidized COBRA benefits, the Sacramento Business Journal reports.

Last month, President Obama signed the 2010 defense spending bill (HR 3326), which extended federal stimulus funding for the COBRA subsidies.

The bill expanded subsidy eligibility to workers who are laid off through the end of February. It also extended the length of the subsidy from nine months to 15 months.

In addition, the bill requires employers to do much of the legwork for carrying out the COBRA extension.

Employers are required to notify newly laid-off workers about the extension and sign them up for benefits if they choose to enroll.

COBRA in California

A September study by the California Department of Managed Health Care found that 13,420 Californians had applied for COBRA subsidies and that more than 10,100 residents met the eligibility requirements.

Although the federal COBRA subsidies only apply to businesses with at least 20 employees, California lawmakers last year passed a measure (AB 23) that expanded the Cal-COBRA program to employers with two to 19 workers.

Lawmakers crafted AB 23 to align with the initial expiration of the federal subsidy at the end of 2009, but observers believe the state likely will lengthen the Cal-COBRA program to conform with the recent federal extension.

Gov. Arnold Schwarzenegger's (R) administration does not believe additional legislation will be necessary to extend AB 23, but the Assembly Health Committee plans to examine the issue (Robertson, Sacramento Business Journal, 1/1).