From the Hotline: Pennsylvania Mini-COBRA vs. Federal COBRA

Question: What are the Pennsylvania “mini-COBRA” rules, and how do they compare and contrast with the federal COBRA rules?  Please outline eligibility and notification rules.

Answer:

Eligibility: Pennsylvania law provides employees and their eligible dependents who lose group health insurance coverage through a small employer (those with 2-19 employees) as a result of certain qualifying events, the right to continue coverage for up to 9 months. To be eligible for continuation coverage, the covered employee or eligible dependent must have been continuously insured under the group policy for 3 consecutive months ending with the termination of coverage.

Qualifying Events:   The qualifying events criteria matches the federal COBRA rules.

Employers are not required to provide continuation for any person covered under the group policy who:

  • Is covered or is eligible for coverage under Medicare;
  • Fails to verify ineligibility for employer-based group health insurance as an eligible dependent; or
  • Is or could be covered by any other insured or uninsured group health coverage arrangement and under which the person was not covered immediately prior to termination (excluding Medical Assistance, CHIP and adultBasic).

Employer/Employee Notice Requirements: An employer must notify a covered employee of the qualifying event and of the right to continue coverage within 30 days of the qualifying event. A model notice is available for employers to use to communicate continuation coverage options to employees (link to that notice is below). The employer must also notify the insurer of the occurrence of the qualifying event within this 30-day timeframe.

Individuals electing continuation coverage must provide notice of the election within 30 days of receiving notice from the employer of the qualifying event.

The plan administrator (generally the employer) or its designee must notify the insurer within 14 days of the covered employee’s or eligible dependent’s election.

Premium Payments: Premium contributions to continue coverage may not exceed 105% of the group rate, to be paid on a monthly basis. The initial premium payment should coordinate with the timing of the employer’s regular payments to the insurer for the group insurance that is being continued.

How Coverage May Be Terminated:   The termination rules criteria matches the federal COBRA rules.