Oregon's state continuation rules ensure that people who work for employers with fewer than
20 employees can receive the full 15 months of federal health insurance premium subsidies.
The subsidies, available through the American Recovery and Reinvestment Act of 2009 (ARRA),
were extended from nine to 15 months in December 2009. They are available to people who were
involuntarily terminated from Sept. 1, 2008, through Feb. 28, 2010, and who meet other federal
eligibility requirements.
The federal government determines who is eligible for the subsidies and how the subsidies apply
to those who are continuing their employer's coverage under COBRA law. Federal contact information
is provided below.
The following information explains how the subsidies apply to people eligible for state continuation.
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What is state continuation?
This is the state's "mini-COBRA" law. It gives people
who work for small employers not subject to COBRA law the opportunity to keep their employer
coverage - normally at their expense - for a limited period of time.
To be eligible for state continuation, workers must have had
at least three months of continuous group coverage (can be more than one employer) on the
date their coverage ended. Also, employees are not eligible for state continuation (or the
federal subsidy) if they are eligible for Medicare or other group health insurance.
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Is the 15 months of state continuation available for everyone or just those eligible
for the subsidy?
The 15 months of state continuation applies only to people eligible for the subsidy. People
who are not eligible for the subsidy may keep their former employer coverage for up to nine
months.
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I have employees who are now finishing their ninth month of subsidy. Can they keep their
plans another six months?
Yes. Those eligible for the subsidy get a full 15 months of subsidy, which means they end
up with more than nine months of state continuation.
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What are insurers' responsibilities for the subsidy program?
- Insurers must notify all state continuation employees who lost jobs after August 31, 2008,
and through Feb. 28, 2010, of their opportunity to elect state continuation with a subsidy.
- Insurers must accept 35 percent of the premium from subsidy-eligible Oregonians as full
payment.
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When must notices go out?
Insurers generally must send notices within 10 days of acting on an employee's loss of coverage.
This notice may be included with the portability notice. (There is a different notice requirement
for people whose subsidies ended before the government extended the program to 15 months.
See below.)
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Can insurers use their own notices?
Yes, state rules specify what must be included in the notices.
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How long do people have to elect coverage?
Generally, 31 days from the day they receive the notice. (People whose subsidies ended before
the government extended the program to 15 months have additional time. See below.)
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Does a subsidy-eligible employee have to elect continuation for other family members to
qualify?
No. Other family members who were previously covered have
"independent" election rights. The family can choose to cover everyone, just one
person or any combination. This is only true of those eligible for the subsidy.
In families that don't qualify for the subsidy, the employee must continue coverage if any
other family members want to stay insured.
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What happens to people whose nine months of subsidy ended before the federal government
extended the subsidy period to 15 months?
If the person didn't keep insurance, he or she can pay their
35 percent of the premium to restore coverage. They must do so by Feb. 17, 2010,
or within 30 days of getting a notice about the subsidy extension, whichever is later. Insurers
must provide additional notification to people who fall into this category, letting them
know of this option.
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If someone loses their job Feb. 28, 2010, but their coverage doesn't end until after Feb.
28, 2010, are they eligible for subsidy?
Yes.
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What about portability coverage?
Employees who lose their jobs may also choose to stay covered through a portability plan
offered by the same insurance company that provides the employer's group coverage. The federal
subsidy is not available to portability plans. However, once state continuation ends, employees
will receive notice of the opportunity to move to a portability plan.
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Are dental/vision insurance included in the federal subsidy?
Yes, if an employer and insurer allows a former employee to continue these coverages. However,
the employer does not have to allow this.
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Are domestic partners eligible for the subsidy?
No. The federal law defines a "qualified beneficiary" as a spouse or a dependent
child of a covered employee. This means that while domestic partners are eligible to stay
on the employer plan, the costs of the employee's partner will be subtracted from the amount
eligible for premium reduction.
Example: An employer plan costs $1,000 for
family coverage, $450 for individual coverage and $800 for the employee plus child(ren).
Subtract $800 from the $1,000. The employee pays 35 percent of the $800 plus the remaining
$200 for the ineligible partner.
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What can people do if a former employer's group health plan tells them they don't qualify
for the premium reduction?
The Center for Medicare and Medicaid Services (CMS) handles
appeals for state continuation. Visit: www.continuationcoverage.net
or call 1-866-400-6689. The application to appeal subsidy denials is posted
online. You may also e-mail questions to: ContinuationCoverage@maximus.com
CMS has contracted with Maximus Federal Services, Inc., to review appeals.
In general, the federal government answers questions about COBRA and general eligibility for
the stimulus subsidy, including how to define involuntary termination. The Oregon Insurance Division
answers questions about state continuation.
