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COBRA & HIPAA

ARRA COBRA Premium Subsidy Extended

On December 21, 2009, President Obama signed a bill extending the COBRA premium subsidy that was first instituted under the American Recovery and Reinvestment Act (ARRA).  ARRA created a temporary government subsidy of COBRA premiums for individuals who were involuntarily terminated between September 1, 2008, and December 31, 2009, and who also became eligible for COBRA continuation coverage during that time period.

Effective immediately, the new bill extends the ARRA COBRA premium subsidy in two ways: 

• It extends the eligibility period for COBRA premium subsidy to any individual who is involuntarily terminated (called “Assistance Eligible Individuals” or “AEIs”) for an additional two months (through Feb. 28, 2010). 
• It extends the maximum premium subsidy period for AEI’s receiving the subsidy for an additional six months (from nine to 15 months).

Unlike the initial ARRA rule, this new bill does not require that COBRA coverage begin by the end of the eligibility period (Feb. 28). Instead, it states that a person is considered an AEI as long as the involuntary termination occurs by Feb. 28, 2010 and is entitled to COBRA coverage as a result of that event.

In addition, any AEI who reached the end of their premium subsidy period prior to this legislation and then dropped COBRA must again be offered the subsidized coverage so that they now can pay the reduced premium for up to six more months.  AEI’s whose subsidy ended on December 1, 2009 but remained on COBRA at the full premium rate for December and/or January will be notified and will receive credit for 65% of their premium that is once again considered subsidy eligible.

Small Employers Subject to State Continuation Guidelines

For employers with under 20 employees subject to State Continuation coverage, the Connecticut Department of Insurance is  currently formulating their policy for the COBRA subsidy extension in conjunction with the U.S. Department of Labor, CMS and NAIC, and is expected to issue guidance within 15 to 30 days of enactment.  CBIA will keep you informed as soon as the State issues their guidance.

The U.S. Department of Labor has issued model notices to help employers comply with the COBRA changes included in the American Recovery and Reinvestment Act/Stimulus Package. For more information: http://www.dol.gov/ebsa/COBRAmodelnotice.html.

* Links followed by an asterisk are password protected and accessible to CBIA Members. For information on joining CBIA, click here.

     The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers with 20 or more employees to continue to provide health insurance for employees (and covered spouses and dependents) who would otherwise lose their health insurance due to a qualifying event.

     Qualified beneficiaries can choose to continue employer-provided health coverage for up to 18 or 36 months, depending on the type of event that caused the employee to lose coverage. Events that are "qualifying events" for COBRA purposes include a termination of employment or reduction in hours, divorce or separation, death, entitlement to Medicare and losing dependent status under the plan.

     As of October 1, 1997, Connecticut law requires all group health insurance plans (regardless of the number of individuals covered) to include continuation coverage provisions virtually identical to COBRA. As a result, employers of fewer than 20 employees that have group health insurance have the same continuation obligations that larger employers have under the federal COBRA.

     Under the Health Insurance Portability and Accountability Act (HIPAA), group health plans and insurers are required to furnish a statement of prior health coverage, commonly referred to as a "certificate of coverage," to provide documentation of the individual’s prior creditable coverage.

For more information on COBRA and HIPAA, click on the following topics:

• Article: This COBRA can bite: Plan administrators need to be aware of COBRA's new notice requirements
• Article: New continuation-of-coverage law is broader than it appears (December 2003)
• Summary of COBRA Continuation Coverage*
• Article: IRS ruling: Spouse dropped from coverage gets COBRA after divorce
  
• Article: Are you covered under HIPAA?
• Article: The HIPAA Nightmare: A legal perspective for the health-care employer
• Article: HIPAA privacy rules and workers' compensation
• The U.S. departments of Treasury, Labor, and Health and Human Services have issued final regulations regarding health coverage portability requirements under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Click here for the final rules. (PDF document, Dec. 2004)
  
• Frequently asked questions about HIPAA (Source: United States Health Department Web site)
• HIPAA Forms
• Employer Information Concerning HIPAA (HCFA Web site)
• Frequently Asked Questions*
• U.S. Department of Labor COBRA & HIPAA Publications:
  These publications are is available to you in PDF format. PDF format allows you to view your form electronically on most computers. The freely available Adobe Acrobat reader is required to view and print PDF files. 
  • Health Plans & Benefits
  • Questions & Answers: Recent Changes in Health Care Law   This publication covers HIPAA, as well as the Mental Health Parity Act of 1996, the Newborns’ and Mothers’ Health Protection Act of 1996, and the Women’s Health and Cancer Rights Act of 1998. (This is a pdf document. It is 88 pages long.)

CBIA now offers COBRA Administration services to existing Health Connections and CBIA/Aetna U.S. Healthcare customers. CBIA’s COBRA Administration program is available only to CBIA Health Connections or CBIA Aetna/U.S. Healthcare customers. Because we already have and maintain the information required to administer your health insurance plans, we can offer you a cost-effective COBRA administration program that will take care of the many details required to stay in compliance with both federal and state laws. For more information click here.

© 2003 Connecticut Business & Industry Association (CBIA). All rights reserved.

The articles, forms and other materials available through this Web site are for informational purposes only. They are not intended as legal advice or as a solution to an individual problem. You are encouraged to consult with appropriate legal counsel prior to relying on the materials in whole or in part.