The updated fact sheet is available at http://www.dol.gov/ebsa/newsroom/fsCOBRApremiumreduction.html

The FAQs for employees are available at http://www.dol.gov/ebsa/faqs/faq-cobra-premiumreductionEE.html

The job loss poster is available at http://www.dol.gov/ebsa/pdf/joblossposter2.pdf

The flyer for employees is available at http://www.dol.gov/ebsa/pdf/cobrastimulusflyer2.pdf

The flyer for employers is available at http://www.dol.gov/ebsa/pdf/cobrastimulusflyer1.pdf

The flyer for employees on the application for review is available at http://www.dol.gov/ebsa/pdf/distributionflyer09.pdf

That’s especially important in Michigan, which continues to have the nation’s highest unemployment rate – 14.7% in November.

Attached to the $636-billion defense spending bill passed on an 88-10 vote by the Senate on Saturday morning, the unemployment extensions now go to President Barack Obama for his signature, which is expected to come quickly.

U.S. Sen. Debbie Stabenow of Michigan said the unemployment extensions and other measures provide help at a time when Michiganders “are struggling to put food on the table, pay heating bills, and afford the health care they need.”

“While recovery from this recession and the creation of jobs cannot come quickly enough, I am relieved Congress was able to pass these important measures to soften the blow of unemployment,” added Michigan’s senior U.S. senator, Carl Levin.

The legislation makes some key changes to programs which were set to expire. For instance:
•The congressional stimulus bill passed in February created a program that paid 65% of monthly insurance premiums for people who lost their employer-based health care coverage because they were laid off. But that program was only open to people who lost their jobs – and their coverage – by the end of 2009. The new bill extends that eligibility deadline by two months, until the end of February 2010.
•It also adds six months to what was a 9-month period that the federal government would make the 65% of payments through the COBRA health plan, extending the period of payments to 15 months.
•The legislation also extends the deadline to qualify for additional unemployment benefits. Last month, Congress passed legislation adding 14 more weeks of emergency benefits – and six more on top of that for people in hard-hit states like Michigan. But they were only available to people exhausting all their other unemployment benefits by the end of December. The new bill extends that deadline to the end of February.
•It also maintains 2009 federal poverty guidelines – which if reset could have moved some people off food stamps and Medicaid – and adds additional funding to the food stamp program.
•Finally, the legislation authorizes the Small Business Association to continue programs to make loans more attractive to borrowers and lenders, in order to free up credit for businesses.

Embedded in H.R. 3326, a measure appropriating funds for the Department of Defense, the nine-month, 65% premium subsidy would be extended by six months to a total of 15 months. It would apply to those who lose their jobs through Feb. 28, 2010. Under current law, employees who lose their jobs after Dec. 31 are ineligible for the subsidy.

The measure, approved on 395-34 vote, also would provide an additional six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation would give beneficiaries whose subsidy ran out and who didn’t pay the full premium a second chance to opt for coverage. For example, a beneficiary whose nine months of subsidized coverage ran out Nov. 30 and who didn’t pay the regular unsubsidized December premium could pay the 35% premium share in January and receive coverage for December.

The legislation would require employers to notify current COBRA beneficiaries and future beneficiaries of the new 15-month premium subsidy.

The House also is expected to take up another appropriations bill, H.R. 2847, with a provision that would extend the premium subsidy to those who lose their jobs through June 30, 2010.

The Department of Defense bill, Washington observers say, is on “fast-track” consideration and could be quickly approved by the Senate.

“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?

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
]]> http://cobracontrol.com/2009/09/01/aetnas-letter-to-insurance-brokers-re-pennsylvania-mini-cobra/feed/ 0 basusacobra http://cobracontrol.com/2009/08/07/new-york-cobra-faqs/ http://cobracontrol.com/2009/08/07/new-york-cobra-faqs/#comments Fri, 07 Aug 2009 16:15:48 +0000 basusacobra http://cobracontrol.com/?p=201 ]]> On July 29, 2009, Governor David A. Paterson signed into law Chapter 236 of the Laws of 2009, which extends state continuation coverage to 36 months, regardless of the qualifying event.  This extension will assist employees and their dependents who are eligible for federal COBRA coverage in fully insured products or New York State continuation coverage. 

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees who work for employers with 20 or
more employees to continue their current group health insurance once they leave employment or have a reduction in hours that makes them ineligible for employer-sponsored coverage.  New York State continuation coverage, also known as “mini-COBRA,” gives the same right to employees who work for employers with fewer than 20 employees.

Before the new state law went into effect, the length of time that a person could have state continuation coverage depended on why the
person was losing coverage.  Under the new law, all people eligible for state continuation coverage may continue their coverage for a total of 36 months, regardless of the reason for the coverage loss.

Under COBRA, if an employee loses coverage due to voluntary or involuntary termination of employment or reduction in hours, then
coverage generally may be continued for up to 18 months from the date coverage would otherwise terminate.  Under the new law, a person eligible for COBRA may elect 18 months of COBRA and 18 months of state continuation coverage, for a total of 36 months.

For more information, please see the Frequently Asked Questions below.

FREQUENTLY ASKED QUESTIONS

When does this law take effect?

The law effects policies or contracts issued, renewed, modified, altered or amended on or after July 1, 2009.  For most policies, the new benefit will apply on the policy’s annual renewal date. You can check with your insurer to determine the renewal date.

How will I receive notice about the extended state continuation benefit?

The law did not change any notice requirements. If you have a qualifying event such as job loss, you will receive notice from
your employer or employer’s benefits administrator.  The notice will provide instructions on how to elect COBRA or state continuation
coverage.

Does this law change COBRA or state continuation coverage in any other way?

No.  All current COBRA and mini-COBRA coverage laws will still apply.  Also, health insurance benefits will remain the
same.  The only difference is that employees can continue their health insurance for up to 36 months rather than 18 months.

If I am entitled to federal COBRA, do I have additional continuation rights under New York law?

Yes.  If you are eligible to continue health coverage under COBRA for 18 months, then you can continue coverage under state
continuation coverage for an additional 18 months.  Note, however, that you have up to a total of 36 months of coverage when combining the COBRA and state continuation benefits.

I am covered through a self-insured plan.  Does this law apply to me?

No.  The law only applies to fully insured plans.

Does the size of my employer affect the length of time of continuation coverage?

No.  Former employees will be allowed to extend their health insurance from 18 months to 36 months, regardless if they worked
for a small employer or large employer.

Will employers have to pay the cost of the additional coverage?

No.  Employees will continue to pay the premium cost.

Does this extension of continuation coverage apply to Healthy NY?

Yes.  The extension applies to Healthy NY group contracts.

Under the previous state continuation coverage laws, people determined to be disabled under Title II or Title XVI of the Social
Security Act were entitled to 29 months of continuation coverage.  Has this law changed?

Yes.  People determined to be disabled under Title II or Title XVI of the Social Security Act are now entitled to up to 36 months of continuation coverage.  There is no longer a specific section in the law pertaining to these people, because all eligible persons are entitled to
continuation coverage for 36 months. 

People who are disabled under Title II or Title XVI of the Social Security Act are eligible for up to 29 months of federal COBRA coverage, plus up to an additional 7 months of state continuation coverage, for up to a total of 36 months. Federal law states that these people are responsible for up to 102% of the premium for months 1 through 18 of coverage and up to 150% of the premium for months 19 through 29 of coverage.  Under the new law, they would also be responsible for up to 102% of the premium for months 30 through 36 of coverage.

Can the duration of state continuation coverage end earlier than 36 months?

Yes.  The 36 month period may end sooner due to the following reasons: (1) timely premium payment is not made to the plan; (2)
the employer ceases to maintain any group health plan (including successor plans); (3) the employee or member is covered under any other group health plan that is not maintained by the employer, even if that other coverage is less comprehensive than COBRA or continuation coverage; or (4) the qualified beneficiary becomes entitled to Medicare benefits.

What if I need more information about this law?

Contact the Insurance Department’s Consumer Services Bureau at (212) 480-6400 or 1-800-342-3736.

The new law has two important provisions. First, it will require small employers’ group health plans that are not subject to the federal COBRA law (typically, those of employers with between two and 19 employees) to offer continued group health insurance to employees and qualified dependents of employees who experience a qualifying event, including death of a covered employee, termination of a covered employee’s employment (other than for the employee’s gross misconduct), and a spouse’s divorce or legal separation from the covered employee.

Such continuation coverage must be offered at the same level of benefits that the employee received prior to the qualifying event, and for a period of up to nine months from the date of the qualifying event. Coverage will be offered at the employee’s or the qualified dependent’s expense (up to 105 percent of the normal cost of coverage).

The law will exclude from continuation coverage any individual who (i) was not covered by the employer’s group health plan for at least three months prior to the qualifying event; (ii) is eligible for coverage under Medicare; or (iii) is, or could be, covered by another group health insurance arrangement. Second, the Pennsylvania mini-COBRA law will enable covered individuals to take advantage of the premium subsidy provisions of the American Recovery and Reinvestment Act of 2009 (ARRA).

Under ARRA, any employee of a small employer who becomes entitled to continuation coverage under the Pennsylvania mini-COBRA law by virtue of his or her involuntary termination from employment will be entitled to a federal government subsidy of 65 percent of the premiums for the coverage, so long as the employee pays the remaining 35 percent. An employee will be eligible for the subsidy only if his or her employment termination occurs after the effective date of the new law, which will be the 30th day after signature by the governor, and before January 1, 2010.

The new law includes notification requirements applicable to employers, employees and dependents, plan administrators, and insurers. The group policy must provide notice of the new law to policyholders within 45 days of the effective date of the law.

Employers of covered employees, within 30 days of a qualifying event, must notify the employee or dependent, the insurer, and the plan administrator (unless, obviously, the plan administrator is the employer) of the qualifying event and must inform the employee or dependent of his or her rights under the law. The covered employee or eligible dependent must notify the plan administrator of his or her election of coverage within 30 days of receiving the notice of rights from the employer.

Stack authored an amendment, approved by the full Senate on Tuesday, clarifying that recipients of mini-COBRA health insurance may also have access to premium assistance provided through the American Recovery and Reinvestment Act of 2009 to purchase COBRA health insurance benefits.

“Hopefully, this window of coverage will provide working people with enough time to get back on their feet, find a new job and hopefully obtain affordable health insurance benefits,” Stack said. “Regardless of the circumstances, everyone should have access to affordable health care, and this legislation will help those who lose their job and health coverage.”

The senator worked closely on the amendment with state Sen. Don White (R-Armstrong, Butler, Clearfield, Indiana, Westmoreland), the author of the legislation (Senate Bill 442) and the Republican chairman of the Senate Banking and Insurance Committee. Stack is the Democratic chairman.

In order to access the federal subsidy, the state mini-COBRA program needed to be substantially similar to the federal COBRA plan. Senate Bill 442 would ensure the mini-COBRA program mirrors the federal program to help former employees access the federal subsidy.

The Obama administration’s economic stimulus plan has allocated funding to help the unemployed manage their health care costs by enabling displaced workers the opportunity to purchase health care benefits at a discounted rate through COBRA.

The federal subsidy would last up to nine months, but could end earlier if the employee fails to pay premiums or finds other health insurance coverage.

In order to utilize COBRA, employees must have been insured under their company’s group policy for three months prior to the termination of coverage. Continuation of coverage would not apply to someone who is eligible for coverage under Medicare; someone who fails to verify ineligibility for other employer-based group health insurance; someone who is covered by a spouse or dependents health insurance.

The bill also provides eligibility for employees terminated after the bill’s effective date and before January 1, 2010 to receive federal stimulus COBRA premium assistance.

COBRA Control Services is available with plenty of capacity to support employers who need to replace Aetna’s COBRA administration services, and COBRA Control Services can have an employer group up and running in a day or so with complete administration services. Simply call COBRA Control Services at: 1-888-887-6187 or emal us a info@cobracontrol.com for more information.

COBRA Control Services Pricing (No Monthly Fees):

• Account Setup and Annual Renewal: $95*
• On-Demand Qualifying Event Notices: $25*
• ARRA Notices: $25*

* Fee Discounts Available for Large Groups and Agent/Broker’s “Books of Business.“

SUMMARY OF AETNA NOTICE ANNOUNCING IT IS DISCONTINUING COBRA HOME BILLING SERVICES

Discontinuing Aetna HMO COBRA Home Billing Services
As a result of the COBRA-related changes, Aetna notified us that it will no longer be able to offer its HMO COBRA Home Billing service, effective May 1, 2009. This service provided COBRA eligibility maintenance and billing to its HMO customers upon request at no additional charge.

Employer Notification
In that email, Aetna stated tht those employers who elected Aetna’s COBRA Home
Billing Service will be notified this week of the discontinuation. Aetna also wrote that its notice will provide the option for Aetna, or the employer to administer those services. Apparently, the mailings will include a list of the names and addresses of customers and members currently being home billed if applicable.

Aetna indicated that specific letters will be distributed depending on the size of the employer group:

• 300+ group size
• 51–299 group size with Aetna COBRA brochure
• 20–50 group size with Aetna COBRA brochure
• 1–19 group size in the states where Aetna is required to administer state continuation* for the employer – States include AR, CA, FL, KS, KY, MD, MS, NE, NH, NV, OK, RI, and VT.
• 1 – 19 group size in the states where the employer is required to administer state continuation* – States include CO, CT, GA, HI, IA, IL, IN, LA, MA, ME, MN, MO, NJ, NY, NM, NC, ND, OH, OR, SC, SD,TN,TX, UT, VA, WA, WV, WI, WY and DC.
• 1-19 group sizes in the states that have no continuation* –States include AK, AL, AZ, DE, ID, MI, MT, and PA.

*State designations are subject to change.

Federal and State Continuation Requirements

Employers with 20 or more employees
Federal COBRA rules apply to group sizes over 20 employees who maintain group health plans. Employers are responsible for administering COBRA, although they may designate another organization (such as Aetna) to administer the program for them. As a result of the ARRA, employers are responsible for funding the subsidy, and are reimbursed through a payroll tax credit.

Employers with less than 20 employees
Many states require continuation of group coverage for terminated employees for group sizes under 20 lives. The ARRA mandates the subsidy for these members as well, but requires carriers, such as Aetna, to fund the subsidy, and then be reimbursed through the carrier’s payroll tax credit. In addition, 13 states require that the carrier handle the administration of state continuation, while 30 states require the employer to administer state continuation. (The remaining balance of 8 states are not affected by this
legislation).

Aetna announced it is making the necessary process changes to enroll assistance eligible individuals in state continuation, accept their 35 percent premium payments and administer the premium subsidy, where applicable.

State Continuation Employer Mailings
Aenta indicatEd that its mailings to employer groups with less than 20 employees to assure compliance with the ARRA are underway and will be distributed this week. Apparently, one set of mailings is aimed at employers in 13 states where Aetna must administer the state continuation. Meanwhile, another set is aimed at employers in 30 states where the employer must administer the state continuation. In both cases, Aetna noted it will need to record terminated employee names and addresses and is responsible for applying for the payroll tax credit for the ARRA subsidy.

States where the employer administers state continuation
In the following states, Aetna wrote that the employer is responsible for administering state continuation*: CO, CT, GA, HI, IA, IL, IN, LA, MA, ME, MN, MO, NJ, NY, NM, NC, ND, OH, OR, SC, SD,TN,TX, UT, VA, WA, WV, WI, WY and DC. Aetna stated that employers in these states will receive the following materials:

• Employer letter explaining the subsidy
• Instructions sheet requesting information
• Employer Attestation – ARRA Employee Subsidy – Form
• ARRA State Continuation Coverage Supplemental Notice for the employer to distribute to individuals on state continuation

States where Aetna administers state continuation
Aetna stated it administers state continuation in the following states, *: AR, CA, FL, KS, KY, MD, MS, NE, NH, NV, OK, RI, and VT. Aetna further stated that employers in these states will receive the following materials:

• Employer letter explaining the subsidy
• Instructions sheet requesting information
• Employee on State Continuation Form
• Employer Attestation – ARRA Employee Subsidy – Form
• ARRA State Continuation Coverage Supplemental Notice for the employer to distribute to individuals on state continuation

*State designations are subject to change.

COBRA Control Services is available with plenty of capacity to support employers who need to replace Aetna’s COBRA administration services, and can have an employer group up and running in a day or so. Simply call COBRA Control Services at: 1-888-887-6187 or emal us a info@cobracontrol.com.

The information contained herein is for informational purposes only and is not intended as legal or tax advice, nor is it intended to advise you of your obligations under ERISA, COBRA, HIPAA or the American Recovery and Reinvestment Act of 2009. It should not be used or relied upon as the basis for any action or choosing inaction. Consult an experienced benefits attorney or tax professional about your specific situation before deciding on any course of action or inaction.

This material is for informational purposes only and contains just a partial, general description of program benefits. Plans and programs may not be available in all service areas.

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., Aetna Health of California Inc., Aetna Dental of California, Inc, Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc., Aetna Health Insurance Company of New York, Aetna
Health Insurance Company and/or Aetna Life Insurance Company (Aetna). In MD, by
Aetna Health Inc., 151 Farmington Avenue, Hartford, CT 06156.

Material in email does not constitute a contract or legal advice and is subject to change. COBRA Control Services, LLC is not affiliated with Aetna or Aetna-related company.

Q. I read in another firm’s newsletter that a qualified beneficiary would be eligible for the subsidy if the employee had “or reduction in hours.” What do you think? 
A. A reduction of hours would not entitle a qualified beneficiary to assistance.  The qualifying event with respect to COBRA continuation coverage must be the “involuntary termination” of the covered employee’s employment. 

Q. If an employer provides COBRA to a separated employee who separated due to gross misconduct and now regrets providing such cobra coverage, can they go back and reclassify the employee and take away their coverage, or, minimally exclude them from ARRA?
A In general, courts do not look favorably upon denying COBRA coverage due to gross misconduct.  Courts have set a very high standard for gross misconduct.  There is a good chance that going back and “undoing” COBRA coverage based on gross misconduct would not withstand scrutiny.