Virginia law already provides for state continuation coverage (90 days) for groups that are too small to qualify for COBRA continuation coverage. However, on April 8, 2009, the General Assembly passed House Bill 2024 which affects employees who are involuntarily terminated during the period of September 1, 2008 through December 31, 2009 in the following ways:

What Do Your Clients Need to Do?
 
Contact Former Employees:
They need to send a Continuation Coverage Election Form to former employees who were involuntarily terminated, and lost their health coverage, to inform them of their opportunity to elect up to nine months of continuation coverage as well as the opportunity to receive a premium reduction. These notices must be sent by the dates listed below:

This Continuation Coverage Election Form should conform to the model form posted on the Department of Labor website found at  http://www.dol.gov/ebsa/COBRAalternativenotice.doc. We have posted a version of this form on www.southernhealth.com on the Employer tab that includes both information about Virginia law and references to the policy through Southern Health so they can make changes electronically. They will need to complete the form with group-specific information, including the amount of premium that individuals will pay. The notice contains a Continuation Coverage Election Form and the "Summary of the Continuation Coverage Premium Reduction Provisions under ARRA" that includes the Request for Treatment as an Assistance Eligible Individual form. 

Submit Election Information:
Groups will need to collect the Continuation Coverage Election Form and the Request for Treatment as an Assistance Eligible Individual form. They will also need to complete the "For Issuer Only" section of the Request for Treatment as an Assistance Eligible Individual. Finally, they will fax both forms to Southern Health at 877-554-9145 within 60 days of the date the notice is sent. 

Collect Premiums from Eligible Individuals:
Southern Health will continue to bill 100% of the premium based on the type of enrollment (employee only, family, etc.). Employers will need to collect 35% of the premium from eligible individuals. Virginia law also allows them to charge eligible individuals an administrative fee equal to 2% of the amount of the total premium. However, if they choose to charge the administrative fee, they should not send it to Southern Health. The Continuation Coverage Election Form that is sent to your former employees should reflect total premium and the amount they will be expected to pay each month. As long as groups have submitted the correct forms identifying members as Assistance Eligible Individuals, Southern Health will write off the remaining 65% of the premium and pursue a tax credit from the federal government to offset the 65%. The credit should be visible on the following month's invoice.

Terminate Coverage When Necessary:
If someone contacts a former employer with information that they are eligible to receive other group health coverage or Medicare, they must immediately terminate their continuation coverage effective as of the date they became eligible for other coverage.

While we hope this information is helpful, this letter and the materials provided on Southern Health's website are for informational purposes only and do not constitute legal advice. If you have any questions regarding your clients' legal obligations you should consult legal counsel. Please call the CARE Team at 877-554-9144 if you have any questions.

Our enrollment policies allow subscribers to terminate coverage in the middle of a contract year at the discretion of their employers. However, if coverage is terminated members will not be permitted to re-enroll for coverage until the next open enrollment period unless there is a qualifying event. Those employer groups who participate in a 125 plan may also wish to consult with their legal advisor to determine whether termination of coverage is possible mid-year under the terms of their plan. 

Occasionally, our groups struggle to meet participation guidelines because some individuals are afraid that enrolling in a group plan will affect their children's eligibility for a state-sponsored program. Though many employees may not be aware of it, the Children's Health Insurance Program Reauthorization Act of 2009 (CHIP) may be a way for them to either stay on or join their group health plan and provide coverage for their dependents using the FAMIS or FAMIS Select programs. Eligibility for the programs is based on income and actually may be affected for the better when the employee is enrolled on a group health plan. When enrolled in FAMIS, eligible dependents are covered through a Medicaid health plan. FAMIS Select is a program that keeps dependents on the same coverage provided to the subscriber of the group plan, but offers a premium subsidy to help offset the cost to the employee. Through the CHIP legislation, if a member is eligible for the premium subsidy and would like to enroll dependents who have not previously been covered, they have 60 days to enroll instead of the usual 31 days. The other side of the CHIP legislation provides a 60 day enrollment period for people who have previously been enrolled in a Medicaid product but have lost eligibility.