On June 10, 2009, Governor Edward G. Rendell signed into law Act 2 of 2009, under which covered employees who lose group health insurance coverage as a result of a qualifying event are eligible for continuation coverage. This new law has similarities to the federal COBRA law, hence the name “Mini-COBRA.” Both laws provide for the continuation of health insurance coverage in certain situations. This new law took effect on July 10, 2009.
The Mini-COBRA law applies only to employees of small businesses, i.e. those with two to nineteen employees. After the cessation of employment, the law gives eligible employees the right to buy continuation coverage for up to nine months after their employment ends. The employee must have been continuously insured under the group policy for three consecutive months ending with the employee’s termination. Employees are required to pay for the continuation coverage on a monthly basis.
Covered employees and/or their dependents will be eligible for continuation coverage where they have lost group coverage due to a “qualifying event”. This can be the death of the covered employee, the termination of employment, a reduction in hours, divorce or separation, eligibility for Medicare, change in dependent status, or the bankruptcy of the employer.
The new law requires that the continuation coverage must include the benefits provided under the group policy. Mini-COBRA applies to hospital, surgical, and major medical policies only.
If the employee subsequently becomes eligible for a new employer’s health insurance coverage or for Medicare, they are no longer eligible for Mini-COBRA. Insurance companies are required to notify policyholders (employers) of the new law by or before August 24, 2009. Small employers should collaborate with their group health plan insurers to make sure the requirements of the new Mini-COBRA are met. Employees who have been involuntarily terminated on or after the effective date of the act (July 10, 2009) and before January 1, 2010 may be eligible for premium assistance under the federal stimulus law (the American Recovery and Reinvestment Act of 2009).
For additional information on Mini-COBRA, you can visit the Pennsylvania Insurance Department website, and search for "mini-cobra", or you can call the following phone numbers: Automated Consumer Hotline: 1-877-881-6388; Philadelphia Regional Office: (215) 560-2630.
Employers or employees who have questions regarding a person's rights should contact the Employment Law and Employee Rights attorneys at Wolf, Baldwin & Associates, P.C. for further information or to schedule a consultation.
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