As you may know, the federal American Recovery and Reinvestment Act of 2009 (ARRA) was
recently amended to extend both the eligibility period and the duration of the ARRA premium
subsidy benefit. Group health plans with less than 20 employees that are not subject to federal
COBRA are required to comply with the Wisconsin continuation and conversion law, s.632.897, Wis.
Stat. The Wisconsin Office of the Commissioner of Insurance (OCI) has issued an emergency rule
that incorporates the new federal requirements and applies them to individuals eligible under state
continuation law.
Employers subject to Wisconsin continuation need to know:
- Eligibility period for premium subsidy has been extended to 2/28/2010
- Period for receiving the premium subsidy has been extended an additional 6 months, to 15 months
- Employers are required notify certain individuals about this extension – as soon as possible - and update the general notice that is issued to their employees
- Employers need to review the special rules for individuals that fall into groups in a “transition period” due to the extension
More detailed information about each of these is shown below.
The Fiscal Year 2010 Department of Defense Appropriations Act (2010 DOD Act) included important
new changes to the COBRA premium subsidy that was created by the American Recovery and Reinvestment
Act of 2009 (ARRA). The changes made by the 2010 DOD Act are retroactive to the original February 17, 2009
ARRA enactment date. Here are the highlights affecting Wisconsin employer groups that are subject to Wisconsin
continuation:
- Description - the 2010 DOD Act extended the federal premium reduction eligibility period for two months until February 28, 2010 and increased the maximum period for receiving the subsidy for an additional six months (from nine to 15 months).
- Transition period - individuals entitled to extension or credit/refund:
- Individuals who had reached the end of the reduced premium period before the 2010 DOD Act extended it to 15 months will have an extension of their grace period to pay the reduced premium. To continue their coverage they must pay the 35 percent of premium costs by February 17, 2010, or, if later, 30 days after they receive notice of the extension.
- Individuals who ended the reduced premium subsidy and paid the full premium may obtain a credit for future months of coverage or a reimbursement (refund) of the overpayment.
- Notification requirements for employers:
- Employer groups are required to provide notice of the extended federal premium subsidy to individuals who are assistance eligible individuals on or after October 31, 2009 or who experience a qualifying event on or after that date.
- Employer groups are also required to notify individuals who are entitled to an extended premium grace period, or a credit or refund for premium paid
Wisconsin Continuation Notice Documents
- General (premium subsidy) notice - a notice that would be sent to any individuals who are assistance eligible individuals - this notice is NOT intended to replace the notice you currently provide to terminated members to inform them of their state continuation and conversion rights, but rather should be used as supplemental information that is required to be provided in accordance with state and federal law.
- Premium subsidy extension notice – this is the notice that would be sent to individuals who are in the transition period described above. These individuals are entitled to the extended premium grace period, or a credit or refund for premium paid.
- “Health insurance ends” notice – this notice includes information about individuals’ rights when an employer discontinues health insurance or goes out of business