Premier NW Insurance Newsletter
2nd Quarter 2010
COBRA/State Continuation Subsidy Extension
On April 15, 2010, President Obama signed into law the Continuing Extension Act of 2010 (HR 4851). Among other provisions, this law once again extends the COBRA subsidy eligibility period under ARRA, this time through May 31, 2010.
As with ARRA, the changes affect continuation coverage offered under COBRA and any comparable state law. Like its COBRA predecessors, this law takes immediate effect and is retroactive to April 1, 2010.
The law makes the following changes:
New Sunset Date: The COBRA subsidy eligibility period (for Qualifying Events on or after September 1, 2008) now ends on May 31, 2010. This period had expired on March 31, 2010. As a refresher, the subsidy is a 65 percent discount off the regular COBRA premium for up to 15 months. Only Assistance Eligible Individuals (AEIs) qualify for the subsidy.
Eligible Qualifying Events: As before, two types of Qualifying Events are subsidy eligible. The first one is an involuntary termination of employment. The second one is a reduction in hours followed by an involuntary termination of employment if that involuntary termination occurs on or after March 2, 2010, and on or before May 31, 2010.
The new law does not change the length of the COBRA maximum coverage period. It is still based on the original reduction in hours Qualifying Event date. Also, the subsidy period (up to 15 months) is unchanged.
UPDATE on Health Care Reform
As you know, Health Care Reform has passed and continues to be discussed and analyzed and debated! To help you understand how this reform will affect you and your employees, we have attached a simplified timeline for the major components of the law.
In the immediate future (for groups renewing in October 2010 and each month thereafter) the major changes that will affect your health insurance policy in 2010 are:
1. Dependent Children will be covered to age 26
2. Bans lifetime and annual maximums
3. Children cannot be excluded from group or individual coverage for pre-existing conditions.
4. Requires insurance carriers to fully cover preventive care services (with no cost sharing by subscriber)
5. Provides a Tax Credit available for Small Employers (under 25 employees for calendar year 2010) who purchase health coverage for their employees.
PLEASE SEE THE LINKS BELOW FOR MORE DETAILED INFORMATION
ABOUT THIS PROVISION.
A few other items to be aware of that will become effective in 2011:
1. Employees who have access to a Flexible Spending Account (FSA) will no longer be able to be reimbursed through the FSA for over the counter drugs.
2. Employees who have access to an HSA account will now be taxed 20% (was 10%) for non-qualified medical expense distributions.
We will continue to keep you updated on any changes in the law or updates as we are notified. We also would encourage you to sign up on the State of Oregon DHS website, for daily updates to Health Care Reform. That website is: http://insurance.oregon.gov/FAQs/fedrealhealthreform-oregon.html
The CLASS Act (part of Health Care Reform)
There is a small “hidden” provision that was deep in the heart of the Health Reform Law that was passed, which may escape people’s radar, but is important for employers to know about. It is THE CLASS Act (Community Living Assistance Services and Support). This is a government sponsored, long-term care plan that offers a basic level of guaranteed issue coverage to working Americans. Employers will be strongly encouraged to offer this plan, but it will not be mandatory. As of now, it appears that all working Americans will be automatically enrolled in this program unless they choose to opt-out. Premiums have not been set, but they will be automatically deducted from employees’ checks. The government is hoping to raise revenue with this product to help pay for the cost of the Health Care Reform.
Employee Benefits Department Contacts:
Suzie Moll, Employee Benefits Manager
Stephanie Bartrug, Employee Benefits Specialist
Robert Rivenburgh, Employee Benefits Specialist
Jared Harding, Employee Benefits Specialist
Lisa Ewers, Office Support, Individual/Medicare