Senate Bill Introduced to Provide COBRA Subsidization
Senator Martha McSally (R-AZ), along with Senators John Cornyn (R-TX), Steve Daines (R-MT), and Dan Sullivan (R-AK) have introduced S. 4329, the Continuous Health Coverage for Workers Act, in order to provide premium assistance for COBRA continuation coverage for individuals whose jobs have been impacted by COVID-19. The language of the bill is intended to be included in the overall Senate response under the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act.
Notably, the Senate proposal would provide employers with up to an 85 percent premium reimbursement for COBRA continuation coverage—beginning with the first month after the Act’s enactment, and ending on December 31, 2020. This subsidy would allow qualified beneficiaries who have not terminated voluntarily to maintain employer-sponsored health coverage at a cost that is more affordable to those who have been made newly unemployed or have had hours reduced.
Other details are provided below.
- The Act requires group health plans to provide various notices—including special enrollment, extension of election period, furlough, and expiration of premium assistance. These notices contain specific content requirements, including information related to the Exchange. Samples will be drafted and issued by the Department of Labor within 30 days following the Act’s enactment.
- Individuals not enrolled in COBRA but who would be eligible for premium assistance may elect COBRA continuation coverage starting after the Act’s enactment, and ending 60 days after the date the group health plan provides the required notice of the extended election period. The group health plan must provide this notice within 60 days of the Act’s enactment.
- If permitted by the plan sponsor, a qualified beneficiary that is eligible for premium assistance may, within 90 days after receipt of a notice from the group health plan, enroll in different coverage offered by the plan sponsor so long as the coverage does not exceed the premium of coverage initially enrolled in, and the different coverage elected does not provide only ancillary medical benefits.
- If a qualified beneficiary is denied premium assistance by a group health plan, the qualified beneficiary is entitled to an expedited review of the denial to be performed by the Secretary of Labor within 15 business days following the receipt of the application.
- The termination of premium assistance will be a qualifying event. The group health plan must also provide a notice to individuals regarding the expiration of premium assistance 15-45 days before the expiration date.
- If an assistance eligible individual becomes eligible for another group health plan or Medicare, he must notify the group health plan that he is no longer eligible for premium assistance in a period to be specified by the Departments of Labor, Treasury, and Health and Human Services. Failure to notify the group health plan may result in a penalty assessed to the individual equal to the greater of $250 or 110 percent of the premium assistance.
- The coverage extends to certain church plans, which are generally exempt from COBRA.
Additional details based on further analysis will be forthcoming as warranted. The timeline for negotiation and enactment of further COVID-19 pandemic relief is short, as both the House and Senate are expected—barring a deviation from their schedules—to leave for a month-long district work period in early August.