BILL NUMBER: AJR 28INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Villines OCTOBER 30, 2009 Relative to health care coverage. LEGISLATIVE COUNSEL'S DIGEST AJR 28, as introduced, Villines. COBRA premiums: federal subsidy. This measure would urge the Congress of the United States to pass an extension of the COBRA premium subsidy enacted under the federal American Recovery and Reinvestment Act of 2009 in order to continue to allow terminated workers to maintain their employer-based group health care coverage. Fiscal committee: no. WHEREAS, The United States is facing the longest and deepest recession since World War II. The national unemployment rate reached a 26-year high of 9.7 percent in August 2009; and WHEREAS, In California, unemployment rates have risen well above the national average to 12.2 percent in September 2009; and WHEREAS, As Californians lose their jobs, many lose their employer-provided health care coverage; and WHEREAS, Under federal law, certain workers and their families who lose their health benefits have the right to choose to continue the group health benefits provided by their group health plan for limited periods of time under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA); and WHEREAS, Studies indicate that COBRA policies can be prohibitively expensive for recently laid off employees; and WHEREAS, The Kaiser Family Foundation reports that in 2008, the average monthly health care premium for a family was $1,057. An average unemployed person would be spending a hefty 74 percent of his or her unemployment insurance on premiums for a family health plan, not including the deductibles or copayments for prescriptions or doctor and hospital visits; and WHEREAS, In recognition of the impact of job losses on individuals and families, the American Recovery and Reinvestment Act of 2009 (ARRA) provides a subsidy for workers who lose their jobs between September 1, 2008, and December 31, 2009, and purchase health care coverage through COBRA; and WHEREAS, Under ARRA, the federal government subsidizes 65 percent of the COBRA premiums for up to nine months of coverage and extends the window of opportunity to sign up for COBRA coverage by 60 days for workers who were laid off between September 1, 2008, and the day ARRA went into effect; and WHEREAS, The 65 percent subsidy brings the average family health care premium down to $370 per month, or 26 percent of the average monthly unemployment benefit; and WHEREAS, This subsidy has allowed laid off workers to maintain their health care coverage while they continue to look for work; and WHEREAS, The subsidy has successfully made health care coverage under COBRA more affordable and has doubled the percentage of laid off employees who opt for COBRA; and WHEREAS, The subsidy will not be available to employees who are laid off after December 31, 2009, but the need for the subsidy will still be present and is in fact expected to grow in 2010. The Congressional Budget Office predicts that the national unemployment rate will grow to 10.2 percent next year; now, therefore, be it Resolved by the Assembly and the Senate of the State of California, jointly, That the Legislature urges the Congress of the United States to pass an extension of the COBRA premium subsidy enacted under the federal American Recovery and Reinvestment Act of 2009 in order to continue to allow terminated workers to maintain their employer-based group health care coverage; and be it further Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, to the Majority Leader of the Senate, and to each Senator and Representative from California in the Congress of the United States.