For years, New York State has provided "mini COBRA", under which an employee, who loses his or her job, could elect to receive continued insured group health coverage under New York State law, if Federal COBRA is not available to that employee. Now, Governor Paterson has signed a law which extends the period of New York State "mini COBRA" coverage to 36 months.
More specifically, New York State Insurance Law section 3221 (m) permits an employee, who is covered under a commercial group or blanket accident and health insurance policy which is not subject to Federal COBRA law, to elect to receive continued health care coverage under that policy in the event of job loss or reduction in work hours. The employee must elect to receive the continuation coverage within 60 days after the later of (1) the date of the event which qualifies him or her for the coverage, or (2) the date of the receipt of a notice of the right to elect the coverage. The employee pays the full premium for the continuation coverage, which is capped at 102 percent of the group rate. Prior to the new law, the period of continuation coverage for an employee was generally limited to 18 months, at which time the right to the continuation coverage was lost.
The new law amends Insurance Law section 3221(m) to require commercial insurers offering group policies to extend the period of the New York State continuation coverage for employees from 18 months to 36 months. Importantly, the new law allows an employee, who had been receiving and has exhausted Federal COBRA coverage, to elect to continue receiving insured group health coverage under New York State law for up to 36 months (including the period of Federal COBRA coverage), if the employee had been entitled to less than 36 months of Federal COBRA coverage.
The new law also requires a not-for-profit corporation or health maintenance organization (an"HMO"), which offers a group contract (or a group remittance contract) that is subject to New York State insurance law, to extend continuation health care coverage from18 months to 36 months, under the same terms and conditions as a commercial insurer.
The new law takes effect as of July 1, 2009 and applies to all policies and contracts issued, renewed, modified, altered or amended on or after that date.
Note to Employers: The most significant feature of the new law is that an employee can elect to receive continuation health care coverage under New York State law for 18 months after he or she was receiving Federal COBRA coverage for 18 months and the Federal COBRA coverage ends. It appears that the insurer, not the employer, is responsible for providing the continued health care coverage required by New York State law. Still, an employer maintaining an insured group health plan, which is subject to Federal COBRA and the new law, should consider coordinating with its insurer and revising its COBRA policy, employee notices, election forms and summary plan descriptions to make this additional 18 months of continuation health care coverage available to its employees.