Establishes a special enrollment period for employees and members with expired health coverage who wish to utilize state continuation benefits

Summary of provisions

Section 1 of the bill would amend Insurance Law § 3221 to create a special enrollment period for people whose continuation coverage exhausted between July 1, 2009 and November 1, 2009 but prior to the renewal, modification, alteration or amendment of the group contract which would entitle them to extend their continuation coverage.

Section 1 of the bill further states that coverage issued during the special enrollment period shall be prospective not more than 30 days from the date of election and payment of premium.

Section 1 of the bill states that a person who continues coverage through the special enrollment period shall be entitled to a total of 36 months of coverage.

Section 1 of the bill also states that any gap in health insurance coverage between July 1, 2009 and the effective date of the coverage issued through the special enrollment period shall not reduce the 36 months of continuation coverage to which a person may be entitled. It also states that any gap in coverage during that period shall be disregarded for the purpose of determining if a pre-existing condition waiting period is applicable.

Section 2 of the bill would amend Insurance Law § 4304 to require not-for-profit corporations and health maintenance organizations ("HMOs") offering group remittance contracts to extend a special enrollment period under the same terms and conditions as commercial insurers.

Section 3 of the bill would amend Insurance Law § 4305 to require not-for-profit corporations and HMOs offering group contracts to extend a special enrollment period under the same terms and conditions as commercial insurers.

Section 4 of the bill would amend § 4 of chapter 236 of the laws of 2009 to provide that it applies to policies and contracts that are issued, renewed, modified, altered or amended between July 1, 2009 and October 31, 2009, and applies to all policies or contracts on or after November 1, 2009.

Section 5 of the bill would provide that the bill take effect immediately, provided that sections one, two, and three of the act will expire and be deemed repealed July 1, 2010, and section four of the act will be deemed to have been in full force and effect on and after July 1, 2009.

Existing law

Insurance Law § 3221 (m) permits individuals covered under commercial group or blanket accident and health insurance policies that are not subject to federal COBRA law to elect state continuation coverage for up to 36 months. It also permits individuals covered under commercial group or blanket accident and health insurance policies that are subject to federal COBRA law to continue coverage under state continuation coverage for an additional 18 months, once the initial 18 months of federal COBRA coverage is exhausted, for a total of 36 months. All such individuals must elect state continuation coverage within 60 days of the event that qualifies them for coverage or within 60 days of receiving notice of the right to elect such coverage. There is no cost to the employer for continuation coverage. The former employee or member pays the full premium, which is capped at 102 percent of the group rate.

Insurance Law § 4304(k) sets forth provisions similar to those of Insurance Law § 3221 (m), permitting the election of state continuation coverage for group remittance contracts with a hospital service, health service or medical expense indemnity corporation.

Insurance Law § 4305(e) sets forth provisions similar to those of Insurance Law 3221 (m), permitting the election of state continuation coverage for group contracts with a hospital service, health service or medical expense indemnity corporation.

Chapter 18 of the Employee Retirement Income Security Act, 29 D.S.C. § 1161, et seq., provides for continuation coverage and additional standards for group health plans.

Chapter 6A of the Public Health Service Act, 42 D.S.C. § 300bb-1, et seq., provides for continuation coverage under State and local group health plans.

The American Recovery and Reinvestment Act of 2009 expanded access to federal COBRA and state continuation benefits for laid-off workers by providing a 9-month, 65% subsidy of premiums.

Legislative history

This is a new bill.

Statement of support

Federal COBRA allows workers to continue their group health insurance coverage for 18 months if they voluntarily or involuntarily leave employment or lose coverage due to a reduction in work hours. However, COBRA only applies to employers with 20 or more employees. To address this gap, the State's "mini-COBRA" law requires small employers with fewer than 20 employees to offer a State health insurance continuation benefit similar to COBRA. Chapter 236 of the laws of 2009 extended the period that workers may receive mini-COBRA coverage from 18 months to 36 months. This is regardless of whether the worker worked for an employer with 20 or more employees and is eligible for federal COBRA or the worker worked for an employer with fewer than 20 employees and is eligible for mini-COBRA.

Chapter 236 of the laws of 2009, which extends the period that a person may continue health insurance coverage from 18 months to 36 months, only applies to health insurance coverage once the policy or contract is issued, renewed, modified, altered or amended. Thus, although the law's effective date was July 1, 2009, many people cannot take advantage of the extension until the coverage is renewed, modified, altered or amended. Furthermore, people who had mini-COBRA coverage and exhausted the initial 18 months before the coverage was renewed, modified, altered or amended are not entitled to an additional 18 months of coverage.

Currently, those who do not have access to group health insurance, including those who exhaust continuation benefits, must purchase coverage on an individual basis. New York's individual health insurance market is standardized, with very comprehensive benefits and prohibitively high premiums. Continuation coverage is available at an average cost of $400 per month for single coverage. The average cost of individual health insurance coverage currently exceeds $970 per month and is higher in certain regions. While the Healthy NY program offers a less expensive option, it is not available to everyone due to eligibility requirements.

Current national unemployment rates are at a 24-year high. New York's unemployment rate was 8.9 percent as of September 2009, up from 5.8 percent in September 2008. An increasing number of workers are experiencing extended periods of job loss or being forced to work part-time. All of these factors contribute to a loss of group health insurance coverage. Also, as companies downsize, older workers are often offered early retirement options as an alternative to lay-offs. These individuals may not have retiree health benefits and can be years away from Medicare. This bill extends a more affordable private health insurance option, at no direct cost to the State or employers, and ensures that this option is available to all people.

Budget implications

This bill will have not have a material impact on State finances.

Effective date

The bill would take effect immediately, provided that sections one, two, and three of the act will expire and be deemed repealed July 1, 2010 and section four of the act will be deemed to have been in full force and effect on and after July 1, 2009.