New York's COBRA Law Could Cost Employers

New stimulus funding has allowed New York state to extend COBRA, a law that allows employees who lose their jobs to retain coverage under their old company's group health plans, to smaller businesses. Now, legislators are seeking to double the number of months laid-off employees can keep the coverage, Crain's New York Business reports.

A law enacted in March allowed former employees of companies with fewer than 20 workers, the threshold for the federal law, to retain coverage under COBRA. Another new law, introduced by Gov. David Paterson, would increase the maximum duration of COBRA from 18 to 26 months, and is expected to pass this month, Crain's reports.

The changes could prove expensive for employers who provide health coverage to workers, because the former employees most likely to have high health costs are also more likely to use COBRA, and under the new law, would use it longer, Crain's reports. Younger, healthier workers tend to forego coverage because they can find plans with lower out-of-pocket costs on the individual market (Benson 5/27).

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