Consumer Alert: Fact Sheet for Consumers Premium Assistance for Employees of Small Employers

Thu, 03/19/2009 - 07:58 — Lynda St. Andre

 

Fact Sheet for Consumers: Premium Assistance for Employees of Small Employers
On February 17, 2009, the President signed into law the American Recovery and Reinvestment Act of 2009 (ARRA), a federal stimulus package.  Under ARRA, if you are or were involuntarily terminated from employment, you may be eligible for premium assistance under the Consolidated Omnibus Budget Reconciliation Act (COBRA).  COBRA is a federal law that provides continuation coverage to employees after certain qualifying events.  COBRA applies to employer groups of 20 or more employees.
Massachusetts law provides similar continuation coverage to employees of small employer groups of 2 to 19 employees.  This is commonly called “mini-COBRA” and is generally available to employees of small employers for certain qualifying events.  Some of the benefits available under ARRA to COBRA recipients, such as premium assistance, are also available to employees who are eligible for mini-COBRA. 
Am I eligible for mini-COBRA with premium assistance?
If you have coverage through mini-COBRA now, or if you became eligible for mini-COBRA on or after February 17, 2009, and you lost your job on or after September 1, 2008, it is likely that you are eligible for the premium assistance.  You will not be eligible for mini-COBRA with premium assistance if you were involuntarily terminated for “gross misconduct” or if you elected mini-COBRA coverage before September 1, 2008.
How much do I have to pay per month for my mini-COBRA continuation coverage if I am eligible for mini-COBRA premium assistance?
You will pay no more than 35% of the total monthly premium for your continued health plan coverage through your former employer.  The amount will depend on your former employer’s plan and the monthly premium.
How will I know if I am entitled to mini-COBRA and, if I am, how will I know how much my payment will be?
You should receive a notice in the mail.  That notice may come from the employer, or an administrator on behalf of the employer, or the insurance carrier.  You should also receive information about your payment amount and instructions on where to send the payment.
What if I do not get a notice?
If you do not receive a notice, you should contact your former employer or the insurance carrier for your former employer’s insurance coverage.
When does my mini-COBRA coverage with premium assistance begin?
If you already have mini-COBRA from September 1, 2008 or after, or if you have just become eligible for mini-COBRA, you will have sixty days from the date of the notice to elect mini-COBRA coverage with premium assistance.  If you elect the coverage, it will be effective as of March 1, 2009 and you will be responsible for 35% of the premium beginning March 1, 2009.  Keep in mind that by the time you receive a notice and elect coverage, it may be April or May, but that coverage is retroactive to March 1, 2009 and you will have to pay for the prior months.
How long will my mini-COBRA coverage and the premium assistance last?
Mini-COBRA is generally available for up to eighteen months and the premium assistance is available for nine months, so long as you do not qualify for other group health coverage during that time and as long as the employer continues to offer a group health plan.  The time period for length of coverage will begin as of the date of your qualifying event.
What if I was eligible for mini-COBRA on or after September 1, 2008, but did not elect it, or declined it, or elected it and then was terminated for lack of payment because I could not afford it?
You will not be able to elect mini-COBRA now, or qualify for premium assistance, unless the Massachusetts legislature changes the mini-COBRA law.  ARRA does not extend the second chance or “special election period” that is available to employees who were eligible for federal COBRA to employees who were eligible for mini-COBRA.
Contact Information
For questions related to federal COBRA and ARRA:  http://www.dol.gov/COBRA
For questions related to the Medical Security Plan:  http://www.mass.gov/dua/msp
For questions related to health insurance options:  http://www.MAhealthconnector.org
For information on all insurance carriers authorized to offer individual health plans in  Massachusetts:  http://www.mass.gov/DOI
If you have additional questions, please contact the Division of Insurance at 617-521-7794.
Note:  The information in this fact sheet is subject to change as further guidance becomes available from the federal government and/or as changes may be contemplated by the Massachusetts legislature.