We wanted you to be aware that the following information is being mailed out to our employer groups with less than 20 employees:
Congress completed action on H.R. 1, the American Recovery and Reinvestment Act of 2009 (ARRA). President Obama signed H.R. 1 into law on Tuesday, February 17, 2009.
This recently-passed legislation provides new subsidies and requirements for employers relating to the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage and state continuation coverage.
For groups With 2-19 employees
As you are already aware, the state of West Virginia provides for state continuation coverage for groups too small to qualify for COBRA continuation coverage. Small employers in the state of West Virginia must 1) notify the insurance carrier of individuals who have elected such continuation coverage, and 2) collect from these individuals the premiums associated with such continuation coverage.
West Virginia Mini-COBRA
An employer group must comply with West Virginia mini-COBRA continuation coverage requirements if it employs 19 or less employees during 50% or more of the typical business days during the preceding calendar year. This number includes both full-time and part-time employees, not just employees enrolled in the group benefit plan.
West Virginia Mini-COBRA and Premium Reduction Under ARRA
ARRA created a new 65% premium reduction for certain eligible individuals who lost their health plan coverage due to involuntary termination of employment from September 1, 2008 through December 31, 2009. The premium reduction applies to periods of coverage beginning on or after February 17, 2009 (i.e., for most employers, March 1, 2009), and lasts for up to nine months. Individuals eligible for this premium reduction pay only 35% of their mini-COBRA premiums and the remaining 65% is reimbursed through a tax credit to the insurance company. For more information about ARRA's requirements, visit the Department of Labor's website at
www.dol.gov/ebsa/cobra.html.
West Virginia Second Election Period
The West Virginia Legislature recently passed Senate Bill No. 522, which provides a "second election period" to participate in West Virginia mini-COBRA continuation coverage for individuals who would have been eligible for the ARRA premium reduction if they had previously elected the West Virginia mini-COBRA continuation coverage.
The West Virginia Offices of the Insurance Commissioner recently released Informational Letter No. 168A which describes this extended election period. A copy of this Information Letter and a model Notice Letter and Election Form to be sent to eligible individuals can be found at
www.wvinsurance.gov/forms/cobra.htm.
West Virginia Mini-COBRA Notice Requirement
While Carelink does not administer COBRA or state continuation coverage on behalf of employers, prior to April 18, 2009, Carelink Health Plans, Inc. will be sending the required Notice Letter/Election Form to eligible individuals of small employer groups in West Virginia who involuntarily lost their health coverage with Carelink Health Plans, Inc. and/or Coventry Health and Life Insurance Company, Inc. between September 1, 2008 and February 16, 2009. This Notice/Election Form will conform to the model Notice/Election Form posted on the Insurance Commissioner's website and inform these individuals of the second election period to enroll in continuation coverage as well as the potential opportunity to take advantage of the 65% premium reduction.
The Notice Letter advises the eligible individual to contact his/her former employer group with any questions regarding continuation coverage.
Continuation Coverage Election Process and Premium Payment
Individuals electing this continuation coverage must submit their Election Form and Request For Treatment As An Assistance Eligible Individual to their employer group.
The employer group will then forward the completed Election Form(s) and Request(s) For Treatment As An Assistance Eligible Individual to Carelink at: Carelink Health Services, P.O. Box 7742, London, KY 40742 or fax to 1-866-557-8756. For those individuals eligible to receive the 65% subsidy, Carelink will continue to bill the employer group for 100% of the group premium; however, the employer group only needs to collect 35% of the group premium from the eligible individual(s), which the employer group will then forward to Carelink.
Important Action Items
Employer Groups Should Notify Us If Someone Contacts Them About a Second Election Period. Employer groups should contact us immediately if an individual contacts them about a second election period notice. We will send out the required Notice as long as the individual meets the required criteria to receive such Notice.
Submit Election Information to Us. When an individual elects West Virginia mini-COBRA continuation coverage, the employer group must provide Carelink with the individual's completed 1) "Election Form" and 2) "Request For Treatment As Assistance Eligible Individual" to us at: Carelink Health Services, P.O. Box 7742, London, KY 40742 or fax to 1-866-557-8756.
Collect Premiums From the Eligible Individuals and Forward Premium Payments to Carelink. As described above, Carelink will continue to bill the employer group for 100% of the group premium; however, the employer group only needs to collect 35% of the group premium from the eligible individual(s), which the employer group will then forward to Carelink. Carelink will claim a tax credit for the 65% subsidy received by eligible individuals.
Employer Attestation Form. Carelink may require the employer group to complete an attestation form verifying that individuals who elected continuation coverage are eligible to receive the 65% subsidy. If requested, please complete these forms and return them promptly to Carelink at: Carelink Health Services, P.O. Box 7742, London, KY 40742 or fax to 1-866-557-8756.
Employer Groups Should Notify Us if Someone Contacts Them About Becoming Eligible For Other Group Health Plan Coverage or Medicare. If someone contacts the employer group to inform them that they are eligible to receive other group health coverage or Medicare, the employer group must immediately provide this information (including the date they became eligible for other coverage) to Carelink.
We hope that this information is helpful. If you have any questions regarding its content, please contact the Coventry CARE Team at: 1-888-781-9444 option 1, selection 2.
