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State House Bill Proposes COBRA Premium Reductions

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State House Bill Proposes COBRA Premium Reductions

A new legislation has been proposed by Rob Matzie which calls for reduction of premiums of the COBRA coverage. The bill has now got the approval of the House and is also found to unite with a similar bill, which was passed by the Senate recently. Together, it will help in the accessibility of COBRA coverage by making it more affordable for the laid-off and fired employees.

Rob Matzie recently proposed a Bill which has now got the approval of State House. The Bill plans in extending the COBRA coverage for all the small business enterprises of Pennsylvania.

The Bill, commonly known as Matzie's Bill was found to merge up with a similar bill as proposed in Senate, which is aiming to increase the accessibility of the COBRA coverage to those companies which has less than 20 workers.

All of us are quite aware of the COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage, a federal-based regulation introduced by the Congress in the year 1986. It offers the benefit to the laid-off employees to retain their health insurance plans, which was provided to them by their ex-employers. However, in order to maintain the coverage, a worker is required to pay the entire amount of premium, which was once paid by his ex-employer.

But as per Matzie's, the COBRA coverage will now be made more affordable, as the new bill proposes to cut the premium rates of the health insurance offered through COBRA.

The new legislation is planned to be stretched for a period of 9 months. Along with this, it proposes about 65% cuts in the COBRA premiums. However, the net amount of premiums, which is to be paid by the small companies for maintaining the coverage, will depend on the nature of the health insurance programs chosen by them.

The Matzie's Bill doesn't make the COBRA coverage free for the employees. This means, they have to pay the premiums to retain their insurance policies. However, the rate of premiums will be much low in comparison to that paid earlier. The bill aims in popularizing COBRA coverage by making it affordable. It is also thought that those workers, who don't have any options of getting an inexpensive health insurance, will now be able to get it through COBRA.

The Department of Labor of the state has got some shocking statistical records, which claims that in September, 2008 around 241,000 small business enterprises were found to have only 20 workers and even lesser than that. These records were shown (as a case study relating to the present condition), by Beaver County Chamber of Commerce's President Diane Dornenburg. She also stated that around 400 small companies, who are not within 600-associate chamber possess 20 workers or even lesser than that.

This naturally raises the importance of the COBRA coverage for such companies. The new legislation of Matzie is thus thought to become the most beneficial option of having health insurance in the future months to come.