Date: February 24, 2009
For more information contact: Jim Guidry, (608) 264-6239 or jim.guidry@wisconsin.gov

Federal Stimulus Bill Helps Unemployed Workers

Madison, WI—Wisconsin Insurance Commissioner Sean Dilweg recognized the changes to a federal law that allows recently laid off workers to continue their health care coverage. The changes affect workers eligible for health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

"We know the cost of health care premiums for unemployed workers makes it difficult for them to purchase coverage," said Dilweg. "The COBRA subsidy will make it much easier for families to continue their health care coverage."

Under current law, most employees, spouses and their dependents who lose their health coverage under an employer's group health plan may continue coverage, at their own expense, for a period of time. Federal law addresses insured health plans and self-funded employer-sponsored plans in the private sector and those plans sponsored by state and local governments. State law applies only to health insurance coverage provided by a licensed health insurance company.

The American Recovery and Reinvestment Act of 2009, also known as the federal stimulus bill, that was signed by President Obama on February 17, 2009, made a significant change to health insurance continuation coverage, known as COBRA coverage, for workers who become unemployed during this period of economic stress. Under the stimulus bill 65 percent of COBRA premiums are subsidized for people laid off between September 1, 2008, and December 31, 2009. The subsidy is limited to nine months and available only to those without another source of group health insurance. Individuals who lost jobs after September 1, 2008, but who didn't sign up for COBRA at the time will get a second chance to do so. Employers must provide their former workers with a notice by mid-April. Individuals who receive these notices will then have 60 days to sign up for the subsidy.

Further information is available at the Department of Labor Web site http://www.dol.gov/ebsa/cobra.html.

It is important to note that the COBRA assistance contained in the federal stimulus package does not help displaced employees who lost their employer-based health insurance coverage because their employer went out of business. That is because in that situation there no longer is a health insurance plan to continue.

Dilweg encouraged Wisconsin residents who have any questions to contact OCI at (800) 236-8517.

Created by the Legislature in 1871, Wisconsin's Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI's mission is to lead the way in informing and protecting the public and responding to its insurance needs.