The deadline is April 18 for businesses to notify laid-off workers who did not continue their group health insurance that they can pick up that coverage now and pay just 35 percent of the premium for nine months. The workers must have been laid off after Sept. 1, 2008.
The opportunity to re-enroll is part of larger health care provision in the American Recovery and Reinvestment Act of 2009, which modifies the 1986 federal law requiring employers of 20 or more workers to offer ex-workers to continue their group health coverage. That law is commonly known as COBRA.
The second chance provision of the federal stimulus package complements the law’s major health care component that allows workers laid off through Dec. 31, 2009 to pay just 35 percent of the monthly insurance premium necessary for continuing their group health insurance coverage. The reconsideration period began Feb. 17 and ends Saturday. Once notified by their former employers of the second-chance option, laid-off workers have 60 days to respond.
Until the stimulus package was passed in February, former employees had to foot the entire monthly premium for extended group coverage, which often made continuing health care insurance unaffordable.
Now, employees laid off since Sept. 1, 2008 and who are eligible or receiving continued coverage under COBRA, are also eligible for a temporary 65 percent reduction in their premium payment.
The bulk of the premium – 65 percent – is paid by the employer or in some cases, insurers or health care providers, for up to nine months. The employer recovers that expense through a credit on his payroll taxes.
The 65 percent premium reduction applies to health coverage paid for beginning Feb. 17. There is no premium reduction for premiums paid prior to Feb.17, 2009. Those eligible for other group health coverage such as a working spouse's plan or Medicare are not eligible, and income limits apply.
Until Dec. 31, employers and health care plan administrators must notify laid off employees about the premium reduction either separately or along with regular notices about the option for continued group coverage under COBRA. That includes workers laid off between Sept. 1 and Feb. 17 who turned down the COBRA coverage.
The Trade Adjustment Assistance Health Coverage Improvement Act of 2009, enacted as part of stimulus package, also increases the COBRA subsidy from 65 percent to 80 percent for workers who were laid off due to foreign competition.
Laid off workers who wish to participate in the program should contact their former employers as soon as possible. Information on notification rights under a private-sector plan or about the health coverage provision in general is available toll-free at (866) 444-3272. Additional details and fact sheets about the stimulus provisions and health care for laid off workers is also available at http://www.dol.gov/ebsa/COBRA.html.
For employers, the U.S. Department of Labor has developed four model notices that can be downloaded at www.dol.gov/cobra for notifying employees:
• A general notice to qualified employees covered by plans subject to the COBRA law at the initial COBRA election opportunity.
• An abbreviated notice for individuals who elected to continue coverage and are still covered by COBRA.
• An alternative notice to be sent by issuers of group health insurance coverage that is subject to state continuation coverage laws.
• A notice of extended election periods for eligible individuals who declined or discontinued COBRA coverage.