COBRA Extension Bill Introduced

Representative Joe Sestak (D-PA), a member of the House of Representatives Education and Labor Committee, introduced  the Extended COBRA Continuation Protection Act (H.R. 3930) on October 26, 2009. The measure would amend the American Recovery and Reinvestment Act of 2009 (ARRA) to extend the eligibility period and maximum period for COBRA premium assistance.  Currently, eligibility for the nine-month subsidy is limited to individuals who have been involuntarily terminated from employment on or after September 1, 2008, through December 31, 2009 and who lose coverage during that period. 

Specifically, H.R. 3930 would extend the ARRA COBRA subsidy eligibility to those who are involuntarily terminated between January 1 and June 30, 2010 and extend the maximum period of assistance to 15 months. 

H.R. 3930 also includes a six-month extension of COBRA coverage. For individuals who are eligible for COBRA as a consequence of termination (or reduction in hours) of employment “occurring on or after April 1, 2008 and before January 1, 2010, if the maximum required period of COBRA continuation coverage is 18 months, such period is extended to 24 months.”  The Council is seeking clarification of this legislative language, however, as the time frame for eligibility for this six month extension is inconsistent with timeframes that appear in the introduction to the bill and other section headings. 

This measure could be included as part of comprehensive health care reform legislation, currently pending in both chambers of Congress or in legislation extending unemployment benefits and other expiring provisions of the stimulus legislation. H.R. 3200, the Affordable Health Care for America Act in the House already includes a provision extending the duration of COBRA coverage.

Senate Finance Committee Health Care Reform Bil

According to http://boston.bizjournals.com/boston/stories/2009/09/14/daily31.html 

“The legislation calls for taxing insurance companies if they offer high-end insurance plans. A $6 billion annual fee also would be assessed on all health insurance companies. Pharmaceutical companies, medical device companies and clinical laboratories also would be hit with new taxes.”

Now, who is going to pay the $6 billion? I can’t believe those insurers are going to take it off their bottom line, so how does this reduce the cost of insurance, and how can this be claimed as reform?

Aetna offers Employers Sample ARRA Attestation Form

Aetna has published a sample of the form client employers may use to attest to a involuntary separation eligible for ARRA. Follow this link.

http://www.mmamktg.com/aetna/midatlanticsmallgroup2009/pa_hb1089_continuation_psletter.pdf

Pennsylvania Department of Insurance Link Reviews the Mini Cobra PA Q&A and links for Model notices included in the Q&A

Pennsylvania Department of Insurance Link  Reviews the Mini Cobra PA Q&A and links for Model notices included in the Q&A; follow this link for details:

 http://www.ins.state.pa.us/ins/cwp/view.asp?a=1274&Q=550035&PM=1#when

IBC wants PA Mini-COBRA Model Notice Portion Returned when Employee Eligible for ARRA

Independence Blue Cross (IBC) of Philadelphia, Pennsylvania has announced that it wants the PA Model Notice Election Form from PA Dept of Insurance – returned if a separated employee is eligible for ARRA  ( Premium Assistance).

Note: Cobra Control Services, LLC will provide its clients’ separated employees with a facsimile version of this election form in its standard PA Mini-COBRA Qualifying Event Notice. Such clients do not need to be concerned about sending this form. However, clients will be required to provide such election form to IBC when their separated employees enroll in an IBC coverage and is eligible for ARRA.

http://s3.amazonaws.com/pgica/556/employee_model_notice_fiinal070909.pdf

Aetna’s Letter to Insurance Brokers re: Pennsylvania Mini-COBRA

The following letter was provided insurance agents/brokers from Aetna regarding PA Mini-COBRA

New Pennsylvania requirements for state continuation

New Pennsylvania legislation (HB 1089) became effective on July 10, 2009.  We’ll be sending letters to plan sponsors explaining the law and our joint requirements established by the state.

The law

The law effects employees (and their eligible dependents) who are employed by a small group (2 to 19 employees); and makes them eligible for Pennsylvania state continuation when coverage is lost due to a qualifying event (i.e. the date the coverage would otherwise terminate). This coverage is available for up to 9 months.

Who is eligible for the subsidy

  • Former employees that elect continuation coverage of health benefits, as made available under state law, between July 10, 2009 and December 31, 2009.
  • Former employees who have not exhausted his or her state continuation rights as mandated by state law.
  • Former employees whose modified adjusted gross income is not more than $125,000 (individual filer)/$250,000 (joint filer).

Plan sponsor requirements

  • Complete and submit an Employer Attestation for any individuals who are eligible for the subsidy.
  • Give the terminating employee notice of continuation within 30 days of the date insurance would otherwise terminate.
  • Notify us within 14 days of the member’s election for state continuation.

For your information, click here for a copy of the letter that your clients will receive. 

Additional information, such as examples of qualifying events and premium costs, may be found on the PA legislation site.

If you have any questions, contact your Aetna Small Group Account Executive or our Broker Sales Support Team at
1-877-28-Aetna (1-877-288-3862).

Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. Those companies include Aetna Health Inc.,and Aetna Health Insurance Company.© 2009 Aetna Inc.
980 Jolly Road
Blue Bell, PA 19422

Independence Blue Cross (IBC) PA Mini-COBRA Frequently Asked Questions

 

Q     
Who is covered under
Mini-COBRA?

A      
Those covered under
Mini-CORBA include former employees and eligible dependents who were
continuously insured under their group policy for an entire three-month period
ending with the employee’s termination.

 

Q   Who is not available for continuation coverage
under Mini-COBRA?

A   Mini-COBRA coverage is not available
for:

§ 
anyone covered under the
policy who is covered by, or is eligible for coverage under Medicare;

§ 
anyone who fails to verify
that he or she is ineligible for employer-based group health insurance as an
eligible dependent;

§ 
anyone who is a member of an
Individual medical plan, self-insured plan, or stand-alone dental plan;

§ 
anyone who is or could be
covered by any other insured or uninsured group health coverage arrangement and
under which the person was not covered immediately prior to such termination
(excluding Medical Assistance, CHIP, and adultBasic);

§ 
a group that is no longer a
viable business.

 

Q     
What benefits will be available under the continuation
plan?

A      
The same hospital, surgical,
or major medical benefits provided to everyone else under the plan.

 

Q     
When will continuation coverage start?

A      
Coverage will start on the
date of the qualifying event.

 

Q     
When will continuation coverage end?

A      
Coverage will terminate when
the former employee or eligible dependent is no longer eligible for the coverage
(see eligibility list above), or the first of the following triggering events:

§ 
nine months after coverage
terminated as a member of the group because of a qualifying
event;

§ 
the end of the period for
which the covered person paid a premium, if the covered person fails to make
timely payment of premium;

§ 
the date the group policy is
terminated.

 

Please note that if a former employee or eligible
dependent is no longer eligible for the coverage, he or she must notify the
administrator within 14 days of the triggering event.

 

Q     
How much will continuing coverage
cost?

A      
Mini-COBRA premiums will be
billed to the employer. Employers may be billed up to 105 percent of the current
group rate to cover the premium and administrative fees.  

  

Q     
Is there any assistance available for reducing the
Mini-COBRA premium?

A      
The American Recovery and
Reinvestment Act (ARRA) of 2009 temporarily reduces the Mini-COBRA premium in
some cases. If a former employee or eligible dependent is eligible for
continuation coverage as a result of an involuntary termination during the
period from July 10, 2009, to December 31, 2009, he or she may be eligible for a
premium reduction through ARRA. Because of ARRA, the premium for continuation
coverage will be reduced to 35 percent, with IBC covering the remaining 65
percent.

 

Q     
How does an involuntarily terminated employee apply for
the ARRA subsidy?

A      
If your employee elects
Mini-COBRA continuation coverage and
believes that he or she meets the criteria for the premium reduction, please
complete the section of the application labeled – “Application for Treatment as
an Assistance Eligible Individual” and return it to IBC. You can find the
application online at www.ins.state.pa.us.

 

Q     
Is everyone, who is involuntarily terminated, eligible
for a premium reduction through ARRA?

A      
No. The following individuals
are not eligible for COBRA premium
assistance through ARRA:

§ 
individuals eligible for
other group health coverage (such as a spouse’s plan) or
Medicare;

§ 
individuals involuntarily
terminated prior to July 10, 2009, whether or not they elected
COBRA;

§ 
individuals terminated for
gross misconduct;

§ 
registered domestic partners or same-sex spouses.

Q     
What are group leaders required to do? 

A      
When a qualifying event
occurs, group leaders are responsible for notifying the former employee and IBC
within 30 days. The Pennsylvania Insurance Department provides model notices on
its website, www.ins.state.pa.us, which
you can use to notify your employees.

 

Q     
What are members required to do? 

A      
If a former employee or
eligible dependent elects to continue coverage under Pennsylvania Mini-COBRA, he
or she must complete the Mini-COBRA application and return it to you for
verification within 30 days of notice of the qualifying event. Group leaders
have 14 days to return the application to their independent broker, consultant,
or IBC account executive.

 

Q     
Where is the application?

A      
The application is available
online at www.ins.state.pa.us.

 

Information about COBRA and New York Mini-COBRA from Empire Blue Cross

Empire Blue Cross (New York) offers this helpful summary of COBRA: http://www.empireblue.com/employer/noapplication/f0/s0/t0/pw_b131391.pdf

Free COBRA Webinar Tuesday 8/18 at 9:00 a.m. and 1:00 p.m.

COBRA and New York Mini-COBRA Webinar

COBRA and New York Mini-COBRA Webinar

The passage of The American Recovery and Reinvestment Act of 2009 (ARRA) led to a number of changes and enhancements to COBRA regulations and their administration.  Additionally, many states, including New York, Pennsylvania, and New Jersey have since introduced and/or enhanced their Mini-COBRA laws.  

Most recently, as we announced in our August 5, 2009, Technical Bulletin, Governor David A. Paterson signed into law three Governor’s Program bills that will make health insurance more affordable and improve access to health care for New Yorkers. 

In this dynamic regulatory environment, staying abreast of regulatory changes is critical.  To help you stay up-to-date with the latest information, we invite you to join us of a Free Federal COBRA and New York Mini-COBRA Update Webinar this Tuesday, August 18, 2009.

 Information to join this Tuesday’s 8/18 COBRA Webinar

Session Times:  9:00 a.m. – 9:45 a.m. or 1:00 p.m. – 1:45 p.m.
Call-in number: 866.564.4091
Passcode: 2246265
Web URL: http://MyEnroll2.glance.net

Cobra Control Services Technical Bulletin: New York Enhances Continuation Coverage

New York Expands COBRA Coverage

 

Governor David A. Paterson signed into law three Governor’s Program bills that will make health insurance more affordable and improve access to health care for New Yorkers. The first extends the period of time for COBRA coverage from 18 to 36 months; the second permits families to cover their young adult dependents through age 29 under their job-based insurance; and the third enacts a series of managed care reforms to make health insurance work better for consumers and permit timely access to necessary health services.

 

In response to inquiries we have received about the COBRA extensions, the following summary aims to clarify new law and its applicability to New York Mini-COBRA and Federal COBRA.

 

Summary

 

The law does extend New York Mini-COBRA from 18 to 36-month. However, it does not extend the 18-month Federal COBRA period, automatically. The law indicates, with respect to Federal COBRA, that insurers will be responsible for providing additional 18-months of state continuation coverage when the COBRA continuant exhausts the federally mandated 18-months of coverage.

 

The New York law (Senate Bill 5471) is an insurance law addressing continuation of coverage in New York, only.  The bill appears to accomplish two goals.  First, it expands existing New York mini-COBRA requirements, and second, it requires insurers to provide enhanced continuation coverage opportunities to certain individuals who exhaust federal COBRA continuation coverage benefits.

 

New York Mini-COBRA

 

Continuation coverage under New York mini-COBRA is extended from 18 months to 36 months for individuals who are entitled to mini-COBRA as a result of a termination of employment.

 

We are preparing a New York mini-COBRA qualifying event letter that our systems will employ whenever a client, who meets the New York Mini-COBRA requirements, initiates a COBRA Qualifying Event Notice in our system.

 

 

Federal COBRA

 

A new state continuation coverage opportunity will be available for individuals who were entitled to less than 36 months of federal COBRA continuation coverage benefits and have exhausted those benefits.  Coverage may be extended for up to 36 months from the date an individual’s continuation coverage began.

 

This new law is a state insurance law, so it will only apply to plans insured in the state of New York and not exempt from state insurance law requirements.  It applies to insurance policies issued, renewed, modified, altered or amended after July 1, 2009.  This means that the extension will not be immediately required for every plan, but calendar year renewals will be subject to the state requirements beginning January 1, 2010.

 

The new law appears to require the insurer (i.e., the group policy, contract or HMO) to “offer” the insured the extension of coverage.  The obligation does not appear to fall on the employer or its COBRA service agent.

 

We expect more guidance on this law will be forthcoming and, upon our receipt of this information, will alert you accordingly.

 

We will be requesting our COBRA service clients to identify the State in which their policies were issued and such policies’ annual renewal dates, so we can
maintain this information to optimally process and manage your COBRA accounts. We expect this request to be sent out within the next 5-7 business days.

 

“Visualize” the Difference between NY Mini-COBRA and Federal COBRA

 

Under the new NY law, continuation coverage looks like this:

 

NY Mini-COBRA   = 36-Months of continuation coverage

Federal COBRA   = 18-Months Federally Mandated + 18 Months of NY Continuation Coverage

 

Remember:
NY is not modifying the Federal COBRA requirement. Rather, it is adding its own requirement following the exhaustion of Federal COBRA duration of 18-months.

 

An analogy would be Medicare with a Medicare Supplement. A Medicare Supplement does not amend Medicare coverage. Rather, the Medicare Supplement begins providing coverage after Medicare runs out. Thus, NY COBRA extension for Federal COBRA does not modify Federal COBRA; rather, it provides an extension to the Federal COBRA.

 

Questions?

 

If you have any questions about this information, please contact us Monday through Friday from 8:30 a.m. to 5:00 p.m. except Federal
holidays.

 

Email:  info@CobraControl.com        Tel:  (888) 887-6187      

 

The information contained herein is for informational purposes only and is not intended as legal advice, nor is it intended to advise you of your obligations
under ERISA, COBRA, HIPAA or the American Recovery and Reinvestment Act of 2009
.