Pennsylvania Gov. Ed Rendell said he will sign legislation expanding Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefits to employees laid off by small companies, following approval of the measure by the state Senate.

Ed Rendell

The “mini-COBRA” bill extends current COBRA benefits, the federal plan that offers health coverage under an employer’s plan for up to 18 months for business with more than 20 people.

In a statement, Sen. Don White (R-Indiana), chairman of the Senate Insurance committee, called the new measure “an important safety net” for small business employees who find themselves between jobs.

“This benefit is already in place for larger companies,” White, who sponsored the Senate version of the legislation, said. “It is time we make it part of the health insurance network for small businesses as well. In addition, this program will enable more Pennsylvanians to take advantage of the relief offered in the federal stimulus package.”

Through the American Recovery and Reinvestment Act of 2009, signed in February, a 65% federal subsidy is available for COBRA premiums, paid back to employers through a payroll tax credit.

Rendell said he would sign the bill, according to the Philadelphia Inquirer, making Pennsylvania the 41st state with a “mini-COBRA” program.

The program goes into effect once the governor signs it, but individuals who left employment with an employer covered under the “mini-COBRA” prior to its enactment are not eligible for enrollment.

“The Mini COBRA program will not solve all of the problems with Pennsylvania’s health care system,” White said. “However, it is an important step in the right direction to maintain affordable accessibility to essential health care. Most significantly, it does not cost the Pennsylvania taxpayers one dime. This measure is already in place in many other states and it is time we make it part of Pennsylvania’s health care network.”