Continuation Coverage

The sweeping health care reform law enacted in March will affect the delivery and administration of group health plans for every employer and employee in the country. So it is fair to ask, "What does this mean from a COBRA coverage perspective?" The answer is— not much.

The COBRA premium subsidy law has been extended for 31 days, until March 31, 2010, with an added twist. Now, eligible individuals who had a reduction of hours but did not elect COBRA coverage due to that qualifying event and later incur an involuntary termination of employment can receive premium assistance under certain conditions.

As required by a new law that extended the COBRA premium subsidy program, model notices explaining an individual's right to the subsidy have been issued by the U. S. Department of Labor (DOL).

Under the American Recovery and Reinvestment Act of 2009 (ARRA) as originally enacted in February 2009, "assistance-eligible individuals" (AEI) were entitled to receive a 65-percent subsidy for continuation coverage premiums for up to nine months if they elected COBRA (or comparable state continuation) coverage and had: (1) a loss of group health coverage as a result of an involuntary termination of employment (other than gross misconduct); (2) incurred the qualifying event and loss of coverage between Sept.

Now that the COBRA premium subsidy provisions under the American Recovery and Reinvestment Act (ARRA) have been extended, the U. S. Department of Labor (DOL) is in the process of getting approval on model notices that will reflect changes to the law.

The average monthly enrollment rates for COBRA coverage have increased by 20 percentage points since the COBRA premium subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA) was enacted in February 2009, according to a new analysis by Hewitt Associates, a global human resources consulting and outsourcing company.

 
President Obama signed into law on Dec. 21 an extension and expansion of a COBRA premium subsidy law that was due to expire on Dec. 31. The extension means new compliance obligations for employers, as that the program now runs through Feb.

Recent amendments to New York state insurance law significantly change how COBRA applies to insured group health plans covering businesses and individuals in the state. The two new changes are: (1) an extension of the 18-month New York "mini-COBRA" period to up to 36 months following a termination of employment; and (2) continued coverage for certain unmarried dependent children under age 30.

Attorney and COBRA expert Paul Hamburger says the no-rescission rule under the health care reform law may override certain fundamental COBRA principles, and in this special report he encourages plan administrators to consider the implications of that possibilty in planning for COBRA administration.

A new law in Connecticut extends from 18 to 30 months group health plan continuation coverage requirements for employees and dependents who have a COBRA qualifying event.

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