State Continuation Coverage Extension to 36 Months

Summary

On November 19, 2009, Governor David A. Paterson signed into law Chapter 498 of the Laws of 2009, which amends Insurance Law §§ 3221(m), 4304(k), 4305(e), and section 4 of Chapter 236 of the Laws of 2009.  Chapter 498 helps to provide continued access to group health insurance by ensuring that all persons eligible for federal Consolidated Omnibus Reconciliation Act (“COBRA”) or state continuation (“mini-COBRA”) coverage receive up to a total of 36 months of coverage, regardless of when the group health insurance contract or policy was issued, renewed, modified, altered or amended.

Pursuant to Chapter 236 of the Laws of 2009, a person who is an employee or member of a group may continue group health insurance coverage for up to a total of 36 months regardless of the reason that the person lost eligibility for coverage. See Department Circular Letter No. 23 (2009).  However, Chapter 236 only applies to policies or contracts issued, renewed, modified, altered or amended on or after July 1, 2009.  Therefore, a person could not take advantage of the 18-month extension of group health insurance coverage until the group policy or contract was renewed, modified, altered or amended.  As a result, any person receiving federal COBRA or mini-COBRA coverage who exhausted the initial 18 months of coverage before the group policy or contract was renewed, modified, altered or amended was not entitled to an additional 18 months of coverage pursuant to Chapter 236. 

To ensure that the benefits provided by Chapter 236 apply to as many people as possible, the Legislature enacted Chapter 498, which amends section 4 of Chapter 236 to make Chapter 236 apply to every group health insurance policy or contract that was issued, renewed, modified, altered or amended between July 1, 2009 and October 31, 2009, and all policies and contracts on and after November 1, 2009. 

Moreover, Chapter 498 amends Insurance Law §§ 3221(m), 4304(k), 4305(e) to create a special enrollment period for an employee or member of a group who exhausted his or her federal COBRA or mini-COBRA coverage between July 1, 2009 and November 1, 2009, but prior to the group policy or contract’s renewal, modification, alteration or amendment.  This special enrollment period entitles an employee or member to extend his or her federal COBRA or mini-COBRA coverage for an additional 18 months, for up to a total of 36 months.  Any gaps in coverage between July 1, 2009 and the effective date of the coverage issued during the special enrollment period will not reduce the total 36 months to which the employee or member is entitled.  Additionally, an insurer must disregard such gaps in coverage for determining if a pre-existing condition limitation applies. 

Further, coverage issued during the special enrollment period shall be prospective, and take effect not more than 30 days from the date of election and payment of the first premium.  An employee or member cannot purchase retroactive continuation coverage.

The special enrollment period runs for 60 days following the group policy or contract holder or former employee or member’s receipt of notice of the special enrollment period from the insurer or, if the group policy or contract holder or former employee or member does not receive notice, then within 6 months of November 19, 2009.  An insurer must make reasonable efforts to provide written notice of the special enrollment period to all group policy or contract holders and former employees or members entitled to the special enrollment period by December 19, 2009.  If you have not received notice of the special enrollment period and believe you are entitled to elect continuation coverage, then you should contact the group policy or contract holder (typically, your employer) and your insurer.   

Frequently Asked Questions

Does this law change COBRA or state continuation coverage (mini-COBRA) in any other way?

No, there are no other changes.

If I am entitled to federal COBRA, do I have additional continuation rights under New York law?

Yes. If you are eligible to continue health coverage under federal COBRA for 18 months, then you can continue coverage under state continuation coverage for an additional 18 months. You have up to a total of 36 months of coverage when combining the COBRA and state continuation benefits.

Does this law apply to municipal cooperatives?

Yes. This law applies to municipal cooperatives.

Does the size of my employer affect the length of time of continuation coverage?

No. Former employees will be allowed to extend their health insurance from 18 months to 36 months, regardless if they worked for a small employer or large employer.

Will employers have to pay the cost of the additional coverage?

No. Employees will continue to pay the premium cost.

Under the previous state continuation coverage laws, people determined to be disabled under Title II or Title XVI of the Social Security Act were entitled to 29 months of continuation coverage. Has this law changed?

Yes. People determined to be disabled under Title II or Title XVI of the Social Security Act are now entitled to up to 36 months of continuation coverage. There is no longer a specific section in the law pertaining to these people, because all eligible persons are entitled to continuation coverage for 36 months.

People who are disabled under Title II or Title XVI of the Social Security Act and who are eligible for federal COBRA are eligible for up to 29 months of federal COBRA coverage, plus up to an additional 7 months of state continuation coverage, for a total of up to 36 months. Federal law states that these people are responsible for up to 102% of the premium for months 1 through 18 of coverage and up to 150% of the premium for months 19 through 29 of coverage. Under the new law, they would also be responsible for up to 102% of the premium for months 30 through 36 of coverage.

People who are disabled under Title II or Title XVI of the Social Security Act and who are eligible for state continuation coverage are eligible for a total of up to 36 months of coverage and would pay 102% of the premium for months 1 through 36 of coverage.

Can the duration of state continuation coverage end earlier than 36 months?

Yes. The 36 month period may end sooner due to the following reasons: (1) timely premium payment is not made to the plan; (2) the employer ceases to maintain any group health plan (including successor plans); (3) the employee or member is covered under any other group health plan that is not maintained by the employer, even if that other coverage is less comprehensive than COBRA or continuation coverage; or (4) the qualified beneficiary becomes entitled to Medicare benefits.

Does this extension of continuation coverage apply to contracts that are not subject to New York State laws?

No. The extension of continuation coverage does not apply to contracts that are not subject to New York State laws. Please contact your employer, benefits administrator or insurance company to find out what state laws apply to the policy.

Does this extension of continuation coverage apply to self-funded plans, dental-only plans, vision-only plans or prescription-only plans?

No. State continuation coverage does not apply to self-funded plans, dental-only plans, vision-only plans or prescription-only plans, and therefore it cannot be extended to 36 months.

However, federal COBRA does apply to dental-only plans, vision-only plans or prescription-only plans. Therefore, since state continuation coverage does not apply to these types of plans, employees will not be able to continue vision only, dental only and prescription only coverage for an additional 18 months, once federal COBRA is exhausted.

Employees will be able to continue a comprehensive plan, consisting of medical benefits and dental benefits for example, for an additional 18 months.

Does this extension of continuation coverage apply to Healthy NY?

Yes. The extension applies to Healthy NY group contracts.

What if I need more information about this law?

Contact the Department of Financial Services” Consumer Assistance Unit at (212) 480-6400 or 1-800-342-3736.

What other options are available?

You and your family have many new health insurance options available through NY State of Health: The Official Health Plan Marketplace.  You can quickly compare health plan options and apply for assistance that could lower the cost of health coverage.  Individuals and families may also qualify for free or low-cost coverage from Medicaid or Child Health Plus through the Marketplace.  Anyone can apply.