On June 3, 2009, the Pennsylvania Senate passed a “mini-COBRA” bill for employees of small employers in Pennsylvania to provide for continued health insurance similar to the federal COBRA law. The bill is on Governor Rendell’s desk for signature and is scheduled to take effect on the 30th day after it is signed.
Small employers not subject to the federal COBRA law (typically, employers with between 2 and 19 employees) will have to offer the right to continue group health insurance to employees and their dependents who experience a qualifying event, including the death of a covered employee, termination of employment (other than for gross misconduct) and a spouse’s divorce. Continuation of coverage will be offered for the same level of benefits that the employee received prior to the qualifying event for a period of up to nine months at the employee’s (or dependent’s) expense (up to 105% of premium).
Excluded from continuation coverage will be any individual who was not covered by the group for at least 3 months prior to the qualifying event or who is eligible for coverage under Medicare or another group health insurance program.
The Pennsylvania mini-COBRA law will enable covered individuals to take advantage of the premium subsidy provisions of the American Recovery and Reinvestment Act of 2009 (ARRA), meaning that the employee (if involuntarily terminated after the effective date of the new PA law and prior to January 1, 2010)) would be entitled to a 65% federal government subsidy, so long as the employee pays the remaining 35%.
Employers have 30 days after the qualifying event to notify the employee or dependent of his or her rights under the law. The covered employee or dependent has 30 days after receiving the notice to elect the coverage. We anticipate that model language for the notification will be made available.