Now Pennsylvania Has A Mini-COBRA
On June 10, 2009, Governor Rendell signed HB 1089, PN 1573, a "Mini" or "Little" COBRA, requiring employers with health care plans to offer continued hospital, surgical and major medical insurance to eligible employees and dependents who elect coverage and pay a portion of the premium. The bill applies to employers, who offer healthcare to employees and who normally employed between two (2) and nineteen (19) employees on a typical business day during the preceding year.
Because of the federal Stimulus Package, a covered employee or dependents with a "qualifying event" (for example an employee's involuntary termination or layoff or a spouse's divorce) is eligible for health insurance premium assistance during the continuation period. The federal Stimulus Package requires an employer covered by COBRA or similar state-like law to front sixty-five percent (65%) of the cost of health care premium and seek a tax credit at the end of each quarter through the IRS Form 941 for employment taxes. See the S&Z website for the IRS form. Pennsylvania's Mini-COBRA new law is a similar state law. Coverage under Mini-COBRA lasts for nine (9) months unless the employee fails to pay the remaining required premium sooner. Some of the provisions of Mini-COBRA differ from the federal provisions.
Pennsylvania's Mini-COBRA will take effect on July 10, 2009. Mini-COBRA does not apply to dental only or vision only coverage, but would apply to group health care policies in effect, delivered or issued for delivery on or after its effective date. To access the text of the new law go to http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2009&sind=0&body=H&type=B&BN=1089.
Bottom Line:
As of July 10, 2009, small Pennsylvania employers, who offer health care benefits, must provide COBRA-like health care continuation coverage. Those same small employers must pay a large portion of insurance premium costs for employees, who are laid off or terminated, up front and rely on tax credits for reimbursement.
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