June 5, 2009 – Minnesota Continuation Law Amended To Allow Extended Election Period
It took two amendments, but Minnesota continuation law, Section 62A.17 of the Minnesota Statutes, has been adjusted to provide certain individuals an extended election period related to the continuation premium subsidy provided by the American Recovery and Reinvestment Act of 2009 (the “ARRA”). See our Client Alerts regarding the ARRA provisions ((https://www.hitesmanlaw.com/news_events/alert_090223.shtml and https://www.hitesmanlaw.com/news_events/alert_090327.shtml).
Legislative Background. The first amendment was enacted on May 6, 2009, and is available at https://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=S1904.2.html&session=ls86. The second amendment, found in Article I, Section 22 of H.F. No. 1853, was enacted on May 22, 2009, and is available at https://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=H1853.3.html&session=ls86. Both amendments are effective upon enactment.
Extended Election Period. Under the first amendment, individuals who (1) would be “assistance eligible individuals” (“AEIs”) under the ARRA, and (2) did not have continuation coverage in effect on February 17, 2009, must be provided an additional election period within which they may elect continuation coverage. If coverage is elected during this extended election period, it is effective as of the first period of coverage beginning on or after February 17, 2009. For most plans, this date is March 1, 2009.
For plans subject to COBRA, the ARRA already requires the plan to offer an extended election period to individuals who would be AEIs. Accordingly, the Minnesota legislation impacts only plans that are:
- fully-insured (or self-insured and sponsored by a governmental employer); and
- not subject to COBRA. [Plans not subject to COBRA include plans sponsored by small employers (generally less than 20 employees) and plans sponsored by churches.]
Carrier Notice Obligations. The second amendment addresses notifications related to the ARRA and the extended election period. Under this amendment, certain employers and health insurance carriers have notice obligations. For example, if an insured health plan is not subject to federal COBRA, the health insurance carrier is responsible for providing a notice to individuals entitled to the new extended election period available under amended Section 62A.17. Such carriers are also required to provide other notices regarding ARRA rights, including the alternative notice described in the Department of Labor’s guidance regarding ARRA notices. The carrier’s obligation to provide such notices is tied to the employer’s obligation (described below) to provide information to the carrier identifying employees whose employment has terminated. The carrier must provide the notice within thirty (30) after the employer provides such information to the carrier.
Employer Notice Obligations. The employer sponsoring an insured group health plan that is not subject to federal COBRA also has notice obligations. Such an employer must notify the health carrier of a covered employee’s termination of employment or layoff and such covered employee’s last known address. This information will enable the carrier to comply with the carrier’s notice obligations. The employer’s notice must be provided by the later of: (i) ten (10) days following the termination of employment or layoff, or (ii) June 8, 2009.
Note: This means, with respect to covered employees whose termination of employment or layoff occurred on or after September 1, 2008, and before May 30, 2009, the employer must provide the information to the carrier by Monday, June 8, 2009!
Action Items. Employers sponsoring group health plans that are subject to Section 62A.17, but not subject to COBRA, will need to take certain actions as a result of the state legislative change, including:
- Identifying individuals who (i) experienced a termination of employment or layoff on or after September 1, 2008, and before May 30, 2009, and (ii) were covered under the plan at the time of the termination of employment or layoff; and providing the required information to the insurance carrier regarding those individuals by June 8, 2009;
- Identifying individuals who (i) experience (or experienced) a termination of employment or layoff on or after May 30, 2009, and before January 1, 2010, and (ii) are (were) covered under the plan at the time of the termination of employment or layoff; and providing the required information to the insurance carrier regarding those individuals within ten (10) days of the termination of employment or layoff;
- Confirming with their insurance carriers that appropriate notices are being distributed as required by the amended Section 62A.17; and
- Making arrangements to administer the continuation coverage elected by AEIs during the extended election period.
Please contact us if you have any questions regarding the new continuation coverage requirements.
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The information contained in this ALERT is intended for general information purposes only and does not constitute legal advice relative to a specific situation.