• New York Extends COBRA Continuation Coverage
  • August 12, 2009 | Authors: Anthony A. Mingione; Kari Knight Stevens
  • Law Firms: Blank Rome LLP - New York Office; Blank Rome LLP - Philadelphia Office
  • New York State recently made significant changes to its “Mini-COBRA” law and health insurance regulatory scheme. These changes are designed to increase benefits and reduce the number of New Yorkers without health insurance. Employees who are eligible for group health coverage and their covered beneficiaries will be directly affected by these changes, which are retroactively effective as of July 1, 2009.

    Background

    Initially, New York’s Mini-COBRA coverage was designed to provide continuation coverage to the employees of small businesses (those with fewer than 20 employees) that was similar to that provided to employees of larger companies under the federal COBRA statute. The new law, however, will provide increased benefits for all New York employees in employer-provided insured health plans—regardless of the size of their employers. The two biggest changes involve the length of time that continuation coverage must be made available, and the “aging off” of adult children.

    Extension of Continuation Coverage Period

    The new law requires commercial insurers that offer group health policies to offer continuation coverage for 36 months. This requirement doubles the 18 months of continuation coverage required under federal law. All New York employees and their covered beneficiaries will now be able to obtain 36 months of continuation coverage, regardless of the size of their employer.

    Extension of the “Age-Off” Limit

    The new law also requires commercial insurers that provide group health coverage to offer a coverage option to participants that allows unmarried children through age 29—regardless of financial dependence—to be covered under a parent’s group health insurance policy. Many policies presently force adult children to “age-off” their parents’ policies upon college graduation, or attaining a lower age (usually between 19 and 23). Under the new law, unmarried adult children can maintain their health coverage through age 29, provided they are not eligible for other employer-sponsored coverage or social insurance. Employers are not required to pay premiums for adult children who elect this coverage; but the law also requires insurers at least to offer employers an option to purchase coverage that includes adult children as dependents in family policies through age 29.

    Additional Changes

    The new law also introduces many other changes to New York’s health insurance regulatory scheme, including: stricter regulation of HMO “look-alike” plans; reducing the payment timeframes to providers for electronically submitted claims; and establishing a new external appeal standard for rare disease treatments.

    The changes to New York’s “Mini-COBRA” law and health insurance regulatory scheme are retroactively effective as of July 1, 1009. Therefore, New York employers should act now and coordinate with their group health plan insurers to ensure that the requirements imposed by these changes satisfied.