Federal and New York State COBRA Continuation of Coverage

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The American Recovery and Reinvestment Act ("ARRA" or the "Act") was enacted on February 17, 2009 (the "Enactment Date"). The Act provides COBRA health insurance premium assistance for eligible employees whose employment is involuntarily terminated between September 1, 2008, and December 31, 2009. The Act introduced a 65 percent federal subsidy of COBRA continuation coverage premiums for up to nine months. Please consult the links above for complete details relating to this federal law.  
The federal premium subsidy available under the Act applies to individuals covered under COBRA as well as to individuals covered under state continuation of coverage laws, sometimes referred to as "mini-COBRA." However, the special extended election period available under the Act only applies to federal COBRA coverage. To address this gap, the New York Insurance Law was amended to grant individuals who are not COBRA-eligible but who are eligible for coverage under the state continuation of coverage law, typically groups with fewer than 20 employees, an extended election right. 
 
For employers with 20 or more employees
Federal COBRA rules apply to employer groups with 20 or more employees that maintain group health plans.  
These employers are responsible for administering COBRA continuation coverage for their terminated employees; Empire is not the program administrator.
As stipulated in the Act, these employers are responsible for funding the COBRA premium subsidy and will be reimbursed by the government through a payroll tax credit.
 
For employers with fewer than 20 employees
COBRA does not apply to groups with fewer than 20 employees. Instead, the New York continuation of coverage program (or, mini-COBRA) applies to terminated employees of groups of under 20.  
The Federal Act makes the 65 percent subsidy available to these individuals as well, but in the case of groups of under 20 requires the carrier, i.e., Empire, rather than the employer, to fund the subsidy and seek reimbursement from the government.
The Department of Labor (DOL) released guidance and model notices on March 19, 2009. We are incorporating that guidance and the model notices into our action plans. If further guidance is issued by the DOL, we will adapt our plans accordingly. Detailed implementation information on the applicable programs for New York is available in the COBRA Subsidy Action Plan Update.
In addition, the following communications on the administration of state continuation are scheduled for release:
 
Employer letters – Empire mailed letters to all employer groups that may have fewer than 20 employees requesting lists of state continuation eligible individuals with qualifying events that occurred since September 1, 2008. Copies of the Employer letter, Model Notice for Employees, and Attestation Form are provided for reference.  
It is imperative that groups complete the Attestation Form and return to Empire via fax to 1-800-780-1224 immediately.  
Member letters – Empire will use the information provided on the Attestation Form to generate a general letter to those members indicated on the Attestation Form. This is separate from, and in addition to, the mailing that the employer is responsible for executing.  
 
Additional information
A Q&A has been developed to help address questions that you may have.
Go to the Internal Revenue Service Web site: http://www.irs.gov/newsroom/article/0,,id=204505,00.html
Go to the U.S. Department of Labor Web site: http://www.dol.gov/ebsa/cobra.html
Or contact your Empire representative or the GBA Contact Center at 1-866-422-2583 with any additional questions.
 
Disclaimer All statements contained in this Q&A document are for informational purposes only and should not be viewed as either labor law or income tax advice. 
 
Questions concerning your Plan or your COBRA continuation coverage rights should be addressed to the contact or contacts identified below. For more information about your rights under ERISA, including COBRA, the Health Insurance Portability and Accountability Act (HIPAA), and other laws affecting group health plans, contact the nearest Regional or District Office of the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) in your area or visit the EBSA website at http://www.dol.gov/ebsa/. (Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA's website.)  

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