Healthcare Reform Update
We have seen the healthcare debate get closer and closer to completion. Right now you may have heard both the House and Senate have passed their version of Healthcare reform. I have many clients and associates ask me what will this mean to them. Honestly, until both versions are reconciled and the president signs them, it is still anyone's guess. We really will not know what is in the final legislation until it is signed into law.
Extension of COBRA Premium Assistance
As you may know, President Obama signed an extension of the COBRA continuation coverage premium assistance program established under the American Recovery and Reinvestment Act of 2009 (ARRA) into law on Saturday, December 19, 2009 as part of the Department of Defense Appropriations act of 2010 (H.R.3326). This act extends the premium subsidy period of the program an additional 6 months, for a total of 15 months, rather than the current 9 months. It also extends eligibility for the subsidy to February 28, 2010, beyond the current cut-off of December 31, 2009.
The Department of Labor (DOL) has until January 18, 2010 to provide additional guidance regarding this extension and associated notice requirements. Specifically, the extension includes notice requirements, as well as requirements for the handling of late payments and overpayments resulting from individuals who may have already exhausted their 9-month subsidy.
The following 3 distinct populations need to receive notification by February 16, 2010, 60 days from the date of the extension enactment
A notice describing the extension must be provided to anyone who was an Assistance Eligible Individual on or after October 31, 2009.
A notice describing the extension must be provided to anyone who has experienced a qualifying event of termination of employment (voluntary or involuntary) on or after October 31, 2009.
A notice describing the extension and the right to pay back premiums and reinstate coverage must be provided to Assistance Eligible Individuals dropped from coverage for failure to pay premiums between the period of the original subsidy end date (e.g., November 30, 2009) and the date of enactment. (Individuals reinstating their coverage must pay the 35 percent of premium costs by 60 days after date of enactment or, if later, 30 days after their plan administrator provides notice of the extension.)
While awaiting specific notice guidance from the DOL, you should check with your COBRA administrator.
Remember, if you have more than 20 full time equivalents, you are subject to COBRA. If you are not subject to COBRA you are still subject to Texas State Continuation which was extended from 6 to 9 months last year.
Please check with your COBRA administrator, your agent or broker, or call us to discuss your particular situation.
Local State Level
Senate Bill 80 passed in August 2009 and is effective for January 2010
This bill permits carriers to issue as an option, plans that require employers to contribute 100%
of the employee premium. This would not alter the current requirement that contribution levels be
uniform for all groups across Texas, either. This new portion would simply allow one new option of a
100% contribution requirement to be used if the employer agrees.
What this means is carriers can offer additional plans with additional savings if the employer pays 100% of the employee only premium. We have seen some new plans emerge from Blue Cross and United Healthcare taking advantage of these new discounts. As an employer, if you pay 100% of your employee's health insurance premium you may benefit from one of these new plans.
If you do not currently pay 100% but could, you might benefit in multiple ways: lower premiums, additional healthy employees coming on the plan which in turn spreads the risk and potentially reduces future cost to insure.
State Continuation SB 1771:
This bill became effective June 19, 2009, and
Extends state continuation to 9 months
It lengthens state continuation for smaller businesses that are not COBRA eligible
- 2‐19 employees: 9 months
- 20‐50 employees: 18 months COBRA plus
6 months continuation or
24 months total
- Gives Texans laid off between 9/1/08 and 2/16/09 a second chance to elect state continuation (to
match federal COBRA provision)
- Employer must send notice to EEs who left between Sept. 1, 2008 and Feb. 16, 2009
- Other matches with COBRA: increases election window from 31‐60 days, premium payment grace
period, risk pool eligibility
- Does not mandate conversion policy offer
- Extension tentatively expires on Sept. 1, 2013
TDI is working on rules for SB 1771 now and anticipate adoption of final rules around the first
of the year.
TDI also has a helpful FAQ page: