News: 2009 Press Release

Insurance Commissioner Steve Poizner today announced that the Department of Insurance is sponsoring AB 23, bipartisan legislation that will allow laid off employees of small California businesses to apply for federal dollars that will help them continue their health insurance. The legislation will be co-authored by Assemblymembers Dave Jones (D-Sacramento) and Nathan Fletcher (R-San Diego), respectively the chair and vice-chair of the Assembly Health Committee.

"Thousands of laid off Californians are without health insurance because they can't afford their Cal-COBRA payments," said Commissioner Poizner. "I'm proud to see all parties come together to allow so many unemployed Californians to keep their health care coverage despite the nation's recession."

The Department of Insurance recently determined that a change in state law was needed to allow laid off employees of small businesses to apply for the federal subsidy. Since then, CDI has drafted bill language along with legislative staff, small businesses and insurers to allow access to the federal money.

The federal stimulus package was signed on Feb. 17, 2009, and includes a 65 percent COBRA subsidy to continue the health coverage for employees who had been laid off between Sept. 1, 2008, and Dec. 31, 2009. The subsidy lasts up to nine months and is subject to some qualifications. Those who had previously declined to enroll in the COBRA program or discontinued coverage due to cost or other factors will be notified of the subsidy and be allowed to enroll in the program.

Federal COBRA covers employees of firms that employ 20 or more employees. California has a separate program, known as Cal-COBRA, which extends the same benefits to employees of small businesses that employ between 2 and 19 people. The federal legislation permits states to allow these employees to qualify for the 65 percent subsidy, but only if the state passes specific legislation.

AB 23 would explicitly allow those who worked for California small employers to enroll in Cal-COBRA.  It will include those who lost their jobs dating back to Sept. 1, 2008, and allow them to withdraw a previous rejection of Cal-COBRA coverage.

In recent weeks, Commissioner Poizner has traveled the state informing unemployed Californians of their options to obtain health insurance. One of the resources he has highlighted is the Foundation for Health Coverage Education's www.coverageforall.org Web site, a one-stop center to find out about health insurance opportunities. Thus far, he has traveled to Los Angeles, San Diego and Sacramento and is scheduled to visit Fresno and San Francisco.