Date: June 4, 2009
For more information contact: Jim Guidry, (608) 264-6239 or jim.guidry@wisconsin.gov

Insurance Commissioner Reaches Out to Unemployed Workers

Madison, WI—Wisconsin Insurance Commissioner Sean Dilweg is reaching out to unemployed workers who are eligible to receive subsidized health insurance coverage through their former employer. The legislation, adopted last month as 2009 Wisconsin Act 11, assists recently unemployed workers to collect a federal subsidy to maintain their health care coverage. The legislation also required employers and insurers to reach out to eligible employees by May 29, 2009, to offer their employees another opportunity to apply for continuation 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 under a federal provision referred to as COBRA. Federal COBRA 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 to health insurance coverage provided by a licensed health insurance company.

"I am grateful that Governor Doyle and the Legislature recognized the real and immediate need of Wisconsin's unemployed workers and applaud their swift response to a very real problem," said Dilweg. "Wisconsin workers who lost their jobs in late 2008 and early this year but were ineligible for the federal subsidy can now take advantage of the same benefits of the federal stimulus bill that have helped other laid off workers maintain health insurance coverage for their families."

The American Recovery and Reinvestment Act of 2009 (ARRA), signed by President Obama on February 17, 2009, made a significant change to COBRA coverage for workers who recently become unemployed. Under ARRA, 65 percent of COBRA continuation 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.

Under the ARRA, individuals who lost jobs after September 1, 2008, but who did not sign up for COBRA at the time are granted a second chance to do so. However, this provision of the stimulus bill was not extended to individuals who were not covered under the federal COBRA law and only subject to state continuation laws. Act 11 extends this second chance to all Wisconsin employees and gives them an opportunity to reacquire their health benefits to take advantage of the federal subsidy.

Dilweg also noted that OCI published a bulletin to group health plan insurers on May 4, 2009, that provides model notices that may be used by group health plans with less than 20 employees that are not subject to COBRA but are required to comply with the Wisconsin continuation and conversion law. The bulletin at is available at OCI's Web site at http://oci.wi.gov/bulletin/0509arra.htm.

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.

The OCI publication Fact Sheet on Continuation and Conversion Rights in Health Insurance Policies provides additional helpful information. Wisconsin residents who have any questions should contact OCI at (800) 236-8517. Information on COBRA continuation coverage and ARRA information is also available at the U. S. Department of Labor Web site at http://www.dol.gov/ebsa/cobra.html.

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.