On June 10, 2009, Gov. Edward Rendell signed into law two significant health care bills that could impact many companies that offer insured health care coverage in Pennsylvania. The first bill expands health insurance coverage for adult children of insured parents, and the second is the Pennsylvania Mini-COBRA bill.
Health Insurance Coverage for Adult Children
Eligible adult children can now continue to be covered by their parent's health insurance plan past the age of 19. In general, the new law will be effective Dec. 7, 2009 (six months after its enactment). The new law will apply to insurers who issue or renew a group health care contract in Pennsylvania after that date. Under the law, insurers must give employers the option to provide coverage for their employee's eligible adult children until age 30. Eligible adult children include children:
- Who do not have health insurance
- Are under age 30
- Are unmarried
- Have no dependents
- Are residents of Pennsylvania or are enrolled as full-time students at an institution of higher education
- Are not provided with private insurance or are not enrolled in or eligible for government benefits
Although this provision must now be available in all insurance contracts issued in Pennsylvania, employers still have the option to choose whether or not to offer the extended coverage to the dependents of their employees. If an employer elects to offer the extended coverage, depending on the requirements of any applicable collective bargaining agreements, the cost of providing the extended coverage to adult dependents may be passed on to employees through increased premiums.
Employers who sponsor insured health plans subject to Pennsylvania law should examine whether they will change their dependent eligibility provisions as a result of this new law.
Effective July 10, 2009, any group health insurance policy in effect, delivered or issued in Pennsylvania to an employer with fewer than 20 employees, will now be subject to the Pennsylvania Mini-COBRA law. Similar to the federal COBRA continuation provisions, Pennsylvania's Mini-COBRA offers employees and their dependents who lose coverage because of a qualifying event, the opportunity to continue group health coverage through their former employer's health plan. Individuals eligible for continuation coverage under the Pennsylvania Mini-COBRA law who satisfy the COBRA subsidy requirements under the American Recovery and Reinvestment Act of 2009 (those whose qualifying event involves an involuntary termination of employment) may be eligible to receive the 65 percent reduction in their premiums.
To be eligible for Pennsylvania's Mini-COBRA, the employee or dependent must experience a qualifying event and must:
- Have had coverage under the employer's group health for the three months prior to the employee's qualifying event
- Not be eligible for Medicare
- Not be eligible for or covered by other private group health insurance
Under the Pennsylvania Mini-COBRA law, the maximum period of continuation coverage is nine months. The cost of the premium under Pennsylvania Mini-COBRA is 105 percent of the group rate, which is higher than the federal rate, and the employer will be responsible for collecting the premium. Another difference between Pennsylvania Mini-COBRA and federal COBRA is that eligible individuals and family members only have 30 days to elect Pennsylvania Mini-COBRA coverage instead of the 60 days provided by federal COBRA. Similar to the federal COBRA statute, however, employers are required to give employees notice of their continuation coverage rights.
Small employers with insured health care policies in Pennsylvania should take immediate action to comply with the new Pennsylvania Mini-COBRA law.