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New Yorkers are entitled to up to 36 months of seamless COBRA/New York State continuation coverage even though the federal stimulus subsidy that helps them pay for insurance expires sooner.

That’s what the New York State Insurance Department said when it advised one health plan to reinstate coverage that was mistakenly terminated when the subsidy assistance expired after 15 months. COBRA and continuation coverage give people the ability to continue their health insurance after they leave employment.

“Consumers should understand that the federal subsidy is just that, it’s a subsidy. Eligible consumers don’t have to reapply for COBRA when the subsidy ends. They can continue coverage by electing to pay the cost of the premium,” Insurance Superintendent James Wrynn said.

Consumers who believe their COBRA coverage has been improperly terminated should contact the Insurance Department for help, Wrynn said.

The issue arose recently when a consumer contacted the Insurance Department, complaining that his insurer, Group Health Inc. (GHI), terminated his coverage. He said the insurer told him that he would have to reapply for COBRA since his subsidy assistance had ended.

The Department directed the insurer to offer to restore the coverage.

The Department advised the insurer that consumers needed to pay the full cost of the premium without subsidy assistance, but that did not mean they had to reapply for COBRA/New York continuation coverage.

Under the federal COBRA and New York continuation laws, employees may continue their health insurance by paying the total cost of the premium, plus a two percent administrative fee, when they lose their jobs. In most cases, they are able to do so for up to 18 months. In addition, New York law allows individuals with COBRA to continue coverage for up to 36 months.

The federal subsidy was designed to help people losing their jobs in the recession by paying for part of their coverage. It applies to people who involuntarily lost their jobs between Sept. 1, 2008 and May 31, 2010 and helps them pay for coverage for up to 15 months.

With the subsidy, an individual’s employer or health insurer pays 65 percent of the cost of coverage and is then reimbursed by the federal government through a payroll tax credit. The remaining 35 percent of the cost of coverage must be paid by the insured individual.

Consumers with questions about COBRA continuation coverage are urged to look at material contained on the Insurance Department’s website,, or to contact the Department’s Consumer Services Bureau if they need further help. The Bureau can be reached from 9 a.m. to 5 p.m., Monday through Friday toll-free at 800-342-3736.


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