Small businesses—including physician practices with 2 to 19 employees—are affected by the state’s new mini-COBRA law, which went into effect on July 10, 2009.
But what exactly does that mean to you and your employees?
It means that your employees and their dependents will be able to extend their group health coverage for nine months if they experience what’s called a "qualifying event," such as termination of employment, reduced hours, death of the covered employee, or divorce of the covered employee. Employees and their dependents must have been continuously insured under the group policy for three months.
For your practice, there are compliance responsibilities.
If you need help administrating mini-COBRA, PMSCO Healthcare Consulting (a subsidiary of the Pennsylvania Medical Society) offers administration services.
Health insurers will bear part of the administrative responsibility. Your insurer should have already notified you that your practice is affected by this law—although if your health plan is self-insured, you aren't required to comply.
Under mini-COBRA, insurers will be responsible for subsidizing 65 percent of premiums when coverage is lost due to involuntary termination of employment between July 10, 2009, and Dec. 31, 2009. They also will be responsible for notifying employees of this assistance.
Employer responsibilities include:
- Notifying the employee, the plan administrator, and the insurer within 30 days if a qualifying event has occurred
- Tracking employee responses (must be within 30 days of notice)
- Notifying the insurer within 14 days of mini-COBRA election
- Collecting premium payments
- Notifying the beneficiary of their conversion rights within 180 days of the end of their COBRA coverage
- Notifying the beneficiary of the expiration of their COBRA coverage 30 days before it expires
- Notifying the insurer that COBRA coverage has expired within 14 days of expiration
Employers can charge up to 105 percent of the premium cost to recoup administrative costs. (Employees will only have to pay 35 percent of the premium if they qualify for the assistance mentioned above.)