Proposed changes to Ohio’s mini-COBRA law to implement federal stimulus bill

As you are aware, the Federal stimulus legislation recently enacted by Congress provides a 65% premium subsidy for those COBRA eligible employees who are involuntarily terminated from September 1, 2008 through December 31, 2009. There are numerous implementation issues particularly for employers.  In this regard, here is a link to the IRS website that answers the implementation questions for employers: http://www.irs.gov/newsroom/article/0,,id=204708,00.html.

The stimulus bill also provides premium assistance for terminated employees of employers subject to Ohio’s mini-COBRA law.  The Strickland Administration is attempting to insert an amendment to Ohio’s mini-COBRA law into Ohio’s Transportation Budget that would increase from six months to twelve months the period for continued coverage and would redefine “eligible employee” to eliminate the requirement that an individual be eligible for unemployment compensation.  Below is a summary of the amendment.

Continuation of group health insurance coverage (R.C. 1751.53 and 3923.38)

Current law requires group health insurance contracts offered by health insuring corporations and sickness and accident insurers to include a provision that allows eligible employees and their dependents to continue receiving coverage under the group contract at the employee's expense for six months after the employee's employment is terminated.  The bill lengthens the time that the employee would be eligible for continued coverage from six months to twelve months.

Under current law an "eligible employee" is an employee that meets all of the following requirements:

(1)  The employee has been continuously covered under a group contract during the entire three-month period preceding the termination of the employee's employment.

(2)  The employee is entitled, at the time of the termination of this employment, to unemployment compensation benefits.

(3)  The employee is not, and does not become, covered by or eligible for coverage by Medicare.

(4)  The employee is not, and does not become, covered by or eligible for any other group coverage under which the employee was not covered immediately prior to the termination of employment.

The bill eliminates the requirement that an individual be eligible for unemployment compensation in order to be eligible for continued coverage under the individual's group contract after termination of employment and requires only that the individual's employment has not been terminated as a result of any gross misconduct on the part of the individual.

Current law also specifies that the continuation of coverage is not required to include dental, vision care, prescription drug benefits, or any other benefits provided under the policy in addition to its hospital, surgical, or major medical benefits provided by a group sickness and accident insurance policy.  The bill removes prescription drug benefits from that list.

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