I just got word of new legislation that affects Texas State Continuation of health coverage.
State Continuation is a Texas State Insurance rule that allows terminated employees to choose to keep their group health insurance for a period of time after they leave employment. It is similar to COBRA in the way it works. Most all fully insured clients that are located in Texas are subject to Texas State Continuation, even if you are not subject to COBRA laws. So if you have less than 20 employees and do not have to offer COBRA, you must still offer State Continuation.
A new Texas law enacted June 21, 2009, changes the way that State continuation works. Some of these changes we designed to help employees who have lost their jobs to keep their health coverage.
State continuation laws apply to NON-COBRA fully insured groups, including church groups, and may also apply to certain members coming off COBRA.
Here are the provisions of the new law:
I. It extends standard state continuation coverage from six months to nine months for effective dates on or after 7/1/2009
• Employer provides notice to employee upon termination
• Premium Payment due within 45 days of first day of coverage
• Premium Payment due within 30 days of due date
II. Changes to post-COBRA continuation coverage (if an employee has taken COBRA, then when that runs out they can elect to continue their coverage under Texas State Continuation):
• Employee will have 60 days to elect State continuation
• Payment due within 45 days of first day coverage
• Payments thereafter due within 30 days of due date
• Coverage remains at six months for post-COBRA (not nine months) – for example, if an employee has used up all 18 months of COBRA, they can keep their coverage for an additional 6 months under State Continuation.
III. Provides limited special enrollment period for federal premium subsidy
• Available only for employees terminated between January 1 and February 16, 2009 , (i.e. employees still
in their election period as of June 21, 2009)
• Participant had to have been within their six month continuation period
• Participant had 60 days to elect continuation
• Members eligible for the special enrollment period were notified of their right to apply for the federal
subsidy, applicable employers were also notified
For a more detailed Frequently Asked Questions, here is a handy reference site from the Texas Department of Insurance: http://www.tdi.state.tx.us/consumer/cpmrecoveryact.html
Also, as a reminder, I can help you outsource all of your COBRA & State Continuation administration!