ARIZONA
HOUSE OF REPRESENTATIVES
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SB 1217: insurance; small employers; continuation coverage |
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PRIME SPONSOR: Senator Brophy McGee, LD 28 BILL STATUS: Banking & Insurance
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Relating to small employer continuation
coverage.
Provisions
Small Employer Continuation Coverage (Sec. 2)
1. Requires a health benefits plan issued or renewed after December 31, 2018 to provide an enrollee and any qualified dependent with the ability to continue coverage under the plan.
2. Directs small employers to notify an enrollee of the enrollee's qualifying event and right to continue their and any qualified dependent's coverage within 30 days after the qualifying event.
3. States a written communication or notice postmarked within 44 days after a qualifying event and mailed by the employer satisfies notice requirements.
4. Specifies that notice to an enrollee constitutes notice to any qualified dependents, except that a separate notice must be sent if the employer knows the dependent's address.
5. Requires a notice to inform an enrollee and any qualified dependent of the following:
a. The enrollee's and any qualified dependent's right to continue coverage at the full cost of the coverage, including the employer's and enrollee's contribution and an administrative fee for the employer not exceeding 5% of the premium.
b. The amount of the full cost of the coverage, stating separately for the enrollee and qualified dependent.
c. The process and deadline for the enrollee to elect continuation coverage for the enrollee and any qualified dependent.
d. The date and time by which the enrollee must submit the initial and ongoing payments to the employer to continue coverage.
e. The loss of continuation coverage if the enrollee fails to pay the premium and administrative fee in a timely manner.
6. Directs ADOI to prepare a sample notice of coverage continuation form and make the form available on its website.
a. States the use of the form is presumed to satisfy notice requirements if properly completed.
7. Requires an enrollee or a qualified dependent to do the following in order to continue coverage:
a. Elect continuation coverage in writing for the enrollee and any qualified dependent within 60 days after the date of the notice to elect continuation coverage; and
b. Submit the first month premium to the employer within 45 days after the date of election to continue coverage.
8. Asserts that coverage continues as if there had been no interruption if the enrollee or qualified dependent elects to continuation coverage.
9. States that an enrollee has 120 days after the date of the notice to elect continuation coverage and pay the required premium and administrative fees, if the employer fails to provide complete, accurate and timely notice of the right to continue coverage.
10. Requires an employer to notify the enrollee or qualified dependent of any change to the premium due at least 30 days before the change is effective if an insurance renewal occurs during the enrollee's or qualified dependent's period of eligibility for continuation of coverage.
11. States that continuation of coverage requirements do not apply if:
a. Continuation coverage benefits are available to the enrollees or qualified dependents under COBRA;
b. The enrollee or qualified dependent seeking to continue coverage is eligible for Medicare.
12. States that continuation of coverage ends on the earliest of the following:
a. 18 months after the date the continuation coverage begins;
b. The date on which the employer terminates coverage under the health benefits plan due to the enrollee's failure to timely pay the premium and administrative fee;
c. The date on which the enrollee or a qualified dependent becomes eligible for Medicare or Medicaid or obtains any other health care coverage;
d. The date on which the employer terminates coverage under the health benefits plan for all employees; or
e. The date the dependent child of the enrollee would otherwise lose coverage under the terms of the health benefits plan due to attaining a certain age.
13. Permits a qualified dependent to be eligible to continue coverage for an additional 11 months if:
a. The qualified dependent is determined under the Social Security Act to have a disability at the time of a qualifying event; and
b. If the qualified dependent provides the written determination of disability from the SSA to the employer within 60 days after the date of the determination and before the end of the 18-month continuation period.
14. Allows health benefits plans to charge up to 150% of the group rate during the 11-month disability extension.
15. Requires a qualified dependent to notify the employer within 30 days after the SSA determine that the qualified dependent no longer has a disability under the Social Security Act.
16. Permits a qualified dependent to be eligible to continue coverage for an additional 18 months if at least one of the following occurs during the 18-month continuation period:
a. Divorce or separation from the enrollee;
b. Death of the enrollee;
c. The enrollee becomes eligible for Medicare;
d. A dependent child ceases to be a dependent child under the health benefit plan.
Military Reserve and National Guard Enrollees (Sec. 2)
17. States that if an enrollee is in the military reserve or national guard and is called to active duty and the enrollee's employment is terminated during or after the active duty period:
a. The termination is considered a separate qualifying event that is distinct from the qualifying event that may have occurred when the enrollee was called to active duty; and
b. The enrollee and any qualified dependent are eligible for a new 18-month benefit period beginning on the later of the date active duty ends or the employment termination.
18. Provides that if an enrollee is in the military reserve or national guard and is called to active duty the following events are considered qualifying events distinct from the qualifying event that may have occurred when the enrollee was called to active duty:
a. The enrollee dies during the period of active duty;
b. A divorce or legal separation of the enrollee from the enrollee's spouse occurs;
c. A dependent child ceases to be a dependent child under the requirements of the employer's health benefits plan.
19. States that if an enrollee who is in the military reserve or national guard has elected to continue coverage and is thereafter called to active duty and the coverage is terminated after provided with health care from DoD:
a. the 18-month period or other applicable time period for which the enrollee would otherwise be entitled to continuation coverage is tolled during the time the enrollee is covered;
b. The enrollee may elect to continue coverage under the employer's health benefits plan retroactively to the termination date for the remainder of the 18-month period or other applicable time period within 63 days after the federal health care program coverage is terminated.
Miscellaneous
20. Defines enrollee, qualified dependent, qualifying event, and small employer. (Sec. 2)
21. Eliminates the ability of an accountable health plan to contract with the AHCCS administration to provide certain health care services. (Sec. 1)
22. Contains an effective date of January 1, 2019. (Sec.3)
Current Law
COBRA provides for employees and their dependents to maintain continuation of coverage under a group health plan if the employee were to lose their coverage because of a qualifying event. Employers that employed fewer than 20 employees are exempt from continuation of coverage requirements (29 US Code § 1161). The coverage must be identical to the coverage provided under the plan to similarly situated employees with respect to whom a qualifying event has not occurred. The period of coverage must be extended for at least the beginning of the qualifying event and ending 18 months after the qualifying event, if the employee was terminated or had work hours reduced. Additional time periods are outlined for additional qualifying events (29 US Code § 1162).
A qualifying event includes the following: 1) the death of the employee; 2) the termination or reduction of hours of the employee's employment; 3) the divorce or legal separation of the employee from the employee's spouse; 4) the employee becoming entitled to Social Security benefits; 5) A dependent child ceasing to be a dependent child under the plan's requirements and 6) A bankruptcy proceeding with respect to the employer from whose employment the employee retired at any time (29 US Code § 1163).
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Fifty-third Legislature SB 1217
Second Regular Session Version 1: Banking & Insurance
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