Health Net's Handling of the NEW Cobra Subsidy for Groups 20+ Employees
Last month, we informed you of the $790 billion federal economic stimulus package President Obama signed into law on February 17, 2009. A key provision in the "American Recovery and Reinvestment Act" is an estimated $25 billion in premium assistance for unemployed workers and their dependents eligible for COBRA or state-specific COBRA continuation coverage.Subsidies of 65 percent of their COBRA or state-specific COBRA premium will be available for up to nine months to workers who are involuntarily terminated from employment between September 1, 2008 and December 31, 2009. The law requires employers to pay the amount of the COBRA premium assistance subsidy and to deduct the amounts from their payroll taxes.
The Act requires that all federal COBRA subsidies must be administered and recovered by the employer group, and not the carrier.
For Health Net's Federal COBRA "Direct Pay" groups, Health Net will assist employer groups to identify "assistance eligible individuals" (AEI’s), meet the notice requirement and effectively administer the ongoing eligibility and premium remittance requirements of the Act. On April 7, 2009 Health, Net sent a group mailing that included the attached Federal COBRA "Direct Pay" letter, a member Application/Attestation Form template and a list identifying all members from the group who had a qualifying event from September 1, 2008 through March 16, 2009. It is the Employer group's responsibility to verify the list Health Net provided and to send the Application/Attestation Form to their affected members by April 17, 2009. For the members that qualify for the subsidy, Health Net will bill the member for 35% of the federal COBRA premium and will bill the group for 65% of the federal COBRA premium during the subsidy period.
For Federal COBRA "Group Pay" groups, it is the group's sole responsibility to identify "assistance eligible individuals" (AEI’s), meet the notice requirement and administer the ongoing eligibility and premium remittance requirements of the Act. Health Net will not send any group or member notification regarding the COBRA premium assistance subsidy for "Group Pay" COBRA groups. Health Net will continue to bill these groups for the entire COBRA premium.
CLICK HERE to view Health Net's Employer mailing
Small Business Group (SBG) Federal Cobra Groups only (groups with 20 or more employees) are included in the comments above. SBG CalCobra groups (groups with less than 20 employees) are not included in the above notification process at this time because California State Legislature has not yet fully defined our state's version of the subsidy. Additional information regarding the CalCobra subsidy and notification process will be provided once defined.
California's contracted brokers will receive the above message in the April issue of Health Net Monthly Broker News. If you have any questions regarding this announcement, please contact your B&P Group Sales Representative