Assemblymember Earlene Hooper: COBRA Expansion Law Amended to Close Loophole, Increase Eligibility

November 16, 2009

Assemblywoman Earlene Hooper (D-Nassau County) and the Assembly have passed an amendment to the Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits law allowing a group of individuals who were covered at the time the law became effective – yet were unable to receive the extension if their benefits expired before their contract was renewed – to continue receiving coverage (A.40006). The original law, passed in June 2009, extended COBRA benefits from 18 to 36 months for individuals whose policies were issued or renewed after July 1 of this year (Ch. 236 of 2009).

With the national unemployment rate at a 26-year high, an increasing number workers are experiencing extended periods of job loss or being forced to work part-time. The result is a loss of group health insurance coverage that these workers cannot afford.

The original law extended health insurance coverage offered through COBRA, but the time-frame for renewing certain contracts inadvertently disqualified a number of individuals. This chapter amendment ensures that these struggling New Yorkers continue to receive the health benefits they need.

The chapter amendment:

• Provides a special enrollment period for this group of individuals to receive benefits;
• Requires coverage issued during the special enrollment period to be prospective;
• Provides up to a total of 36 months of benefits;
• Prohibits any pre-existing condition exclusions from applying to lapses in coverage;
• Allows insurers 30 days to make a reasonable effort to provide written notice of the special enrollment period;
• Gives those individuals who receive notice 60 days to enroll and those who do not receive notice six months from the immediate effective date; and
• Changes the effective date from the reliance upon renewal to a flat effective date for all policies and contracts on or after Nov. 1, 2009.

COBRA allows workers and their families who lose their health benefits – because of voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce or other life-altering events – the right to continue their health benefits provided by their group health plan for a limited period of time.

As companies downsize, older workers are often offered early retirement options as an alternative to lay-offs. These individuals may not have retiree health benefits and can be years away from Medicare. This bill allows these individuals to maintain their existing coverage for a longer period of time, without which they would be uninsured after 18 months.

Providing New Yorkers with coverage, particularly if their employment status is reduced, is a priority. This extension ensures that affordable health insurance coverage is available to those who need it.

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