Making COBRA More Equal

Equal Access to COBRA Acts Expand Coverage to More Families

Many families in today’s economy are struggling to balance family budgets after one or both breadwinners lose their job. COBRA Continuation Health Coverage offers an important support to those families by guaranteeing they can continue to buy into their old health plan after being laid off. Yet many families who include domestic partners, same-sex spouses, or multigenerational members are unable to access this critical benefit.

A new bill introduced last month in Congress would rectify this longstanding inequity in the COBRA system by expanding federal COBRA health care continuation guarantees beyond only opposite-sex, married couples. The Equal Access to COBRA Act of 2010, introduced by Sen. Barbara Boxer (D-CA), would guarantee same-sex spouses, domestic partners, and other beneficiaries such as parents, grandparents, or siblings the opportunity to maintain their employer-provided health insurance plan through COBRA. The bill would not require employers to offer health insurance to families or any relatives. It would merely offer all covered family members the same opportunity to maintain health care coverage.

COBRA guarantees that individuals who receive health insurance through their employer can keep that insurance after job loss by paying the full premium of the group insurance, including the employer’s contribution. Many employees have a spouse, partner, or other relative on their plan. COBRA also guarantees spouses the opportunity to maintain their insurance in the case of other qualifying events, such as divorce, separation, or death, or if the employee becomes entitled to Medicare.

Yet even if a company offers family insurance to an employee’s partner or other relative, that company does not have the legal obligation to allow employees to maintain their partners’ insurance through COBRA after a qualifying event. COBRA currently only applies to the employee and his or her spouse and children. The Defense of Marriage Act limits the definition of a spouse to opposite-sex spouses only, regardless of differing state laws. Many responsible businesses do offer full health care continuation for domestic partners even without the requirement, but there is no guarantee that a given employer will offer that coverage. The new bill would guarantee COBRA to all beneficiaries after any of the above qualifying events.

Paying the full premium for coverage can often be burdensome for laid-off workers even with the COBRA guarantee. Congress addressed this in the Recovery Act by paying for 65 percent of the full premium for coverage. (This subsidy expired on March 31, and Congress must pass new legislation to extend it.) But again, many families were left out. Even if a company was responsible and offered continuation coverage for domestic partners, the worker was often not eligible for the subsidy.

The Equal Access to COBRA Act would correct these outdated policies and ensure continued health coverage for more American families. It would also take a step toward ensuring that people are not discriminated against because of their marital status or gender. Nearly half of adults today are unmarried, including same-sex spouses who have not been recognized as married in the 2000 Census and other government surveys.

Nontraditional families, including domestic partnerships, same-sex marriages, and multigenerational families are increasingly common. There are 6.6 million opposite-sex unmarried partners, nearly 800,000 same-sex couples, and 16 percent of Americans living in a multigenerational household, according to new research from the Pew Research Center.

Limiting benefits only to those who are married is discriminatory and excludes tens of millions of people from basic benefits. This bill would be an important step to equality among American families.

Liz Weiss is a Policy Analyst with the economic policy team and Josh Rosenthal is Special Assistant to the External Affairs Department at American Progress.