According to Workforce Management, on December 19, Congress approved -- and the President signed -- a military spending bill that includes the extension of federal COBRA health insurance premium subsidies for unemployed workers.
The article states that the legislation will provide another six months of subsidized coverage for beneficiaries whose nine-month COBRA 65% premium subsidy has run out. It also gives beneficiaries whose subsidy expired and who didn’t pay the full premium the opportunity to receive retroactive coverage. The legislation also requires employers to notify current and future COBRA beneficiaries of the new 15-month premium subsidy.
COBRA is simple in concept but complex in implementation. More information can be found on the Department of Labor website, and of course, you can consult a professional.
Recently, the NY Labor and Employment Blog offered a description of changes to New York’s “mini-COBRA” law, along with other recently-passed employment legislation. The Governor’s Office notes that the legislation was passed so that New Yorkers can access the subsidy available under the Federal Stimulus Program.
We practice in New York, and health insurance coverage laws can be very confusing, so we offer a few comments that might be particularly helpful to both employers and employees.
First, a little background: Since the federal COBRA law covers only employers with 20 or more employees, some states have enacted similar laws to cover employers with 2-19 employees. By “cover” we mean, of course, that terminated employees (and some others) must be offered the opportunity to continue their health insurance coverage for a limited period, albeit without the employer subsidy (but now, for some, with a temporary federal “Stimulus” subsidy). Usually, the state laws mirror the federal law, although each state may have enacted one or two variations.
The New York amendment to its “mini-COBRA” law is one such variation. The amendment extends coverage from 18 months to 36 months following termination of employment. On the surface, this new extension to 36 months seems to cover all New York employers (and, thus, all terminated employees in New York). It does not.
As mentioned by The New York Labor and Employment Blog, New York’s law applies only to insured plans. Thus, New York’s law would not apply to the largest, self-insured employers. They continue to be covered only by the federal law, even in New York.
Although well-intended and undoubtedly of benefit to some individuals and their families, the New York provision may become a source of further confusion. Employers are required to provide notice to terminated employees in a detailed COBRA letter and with all the recent changes to COBRA, state and federal, it pays to review the letter carefully and to ask appropriate questions.
The NY Labor and Employment Blog offers a detailed description of these changes, along with other recently passed legislation.
