COBRA/Spendulus Update

[Updated - scroll down]

FoIB Bill Montgomery, CIC, points us to another "deal killer" in this bill. According to a memo from United Healthcare, "the subsidy provisions apply to state continuation coverage that is comparable to federal COBRA. That would include so-called "mini-COBRA" state laws that cover groups below the 20 employee threshold for COBRA."

Here in Ohio, groups with 2 (!) or more employees must indeed offer such an option; the key threshold is whether the (former) employee is eligible for unemployment compensation. If so, he or she may elect to continue the group coverage, at his/her own expense, for up to 6 months. Of course, this now means "at a substantial discount" for up to 6 months.

This does not bode well for small employers, who may have believed that they'd "dodged a bullet" when it appeared that these new reg's applied only to larger, COBRA compliant groups.

Of course, since "mini-COBRA" admin requirements are much less onerous than COBRA's, it's up to the (now former) employee to seek out this coverage. Still, if the extra costs are a problem for COBRA compliant groups, they could be disasterous for mom-and-pop shops.

Ooops.

Over on the Left Coast, co-blogger Bill Halper reports that California has CalCobra. He says that it "covers all group health plans (except those regulated by ERISA) with 2-19 eligible employees. The eligibility requirements are the same as Federal Cobra: as long as you are on the employer�s plan, pretty much anything short of walking in carrying an Uzi means you�re eligible. Voluntarily quitting your job, which would make you ineligible for unemployment, doesn�t affect your CalCobra eligibility. You can stay on CalCobra for 36 months; normally premiums are 110% of the employer�s premiums [ed: well, they were 110%. Now, not so much].

It�ll be amusing to see how this is implemented. Under CalCobra, the carriers are responsible for all of the administrative work. The employer notifies the carrier of a qualifying event, the carrier sends out the notice and then bills the participant and collects the premium. The employer is completely out of the loop. The Federal Law complicates things a bit.

OY! UPDATE: Just got this from one of our dental carriers: "Dental benefits are included in the health plan definitions of COBRA."

Exit question: If I didn't have dental before, will I be able to elect it at termination?