COBRA Law Summaries
New York, COBRA Law Summaries
New York's health care continuation law is codified in the McKinney's Consolidated Laws of New York Annotated, Insurance Law, Chapter 28, Article 32, Sections 3221(e), 3221(m) and 4235(f).
COVERAGE
Employers maintaining group health policies are affected. Note, however, that the statute does not apply where a continuation benefit is available to an employee pursuant to COBRA (Insurance Law, Sec. 3221(m)(6)). A similar law applying to group contracts issued by hospital service, health service or medical expense indemnity corporations is located in the Insurance Law at Sec. 4304(e) and (k).
EXCEPTIONS
New York's health care continuation law does not apply where a continuation benefit is available to an employee pursuant to COBRA (Insurance Law, Sec. 3221(m)(6)).
WHAT THE EMPLOYER MUST DO
Eligibility requirements.- An employee or member, and his or her dependents, covered by a group plan, are generally eligible. However, coverage will cease when the employee, member or dependent first becomes, after the date of election, entitled to coverage under Medicare or under another group plan that contains no exclusion or limitation on preexisting conditions of such employee, member, or dependent (Insurance Law, Sec. 3221(m)(1)(A) and (B)).
A group policy may not terminate the coverage of a dependent spouse when the spouse or employee attains the minimum age for Medicare eligibility for so long as the policy remains in force and the spouse is ineligible to receive any of such Medicare benefits. In order for this provision to apply, proof of the spouse's Medicare ineligibility must be submitted to the insurer within 31 days of the date notice of termination of coverage is sent by first-class mail (Insurance Law, Sec. 4235(f)(3)).
A similar law applying group contracts issued by hospital service, health service or medical expense indemnity corporations may be found in the Insurance Law at Sec. 4305(c)).
Disability of dependent child.- If a policy specifies that coverage is to be terminated upon a dependent's attainment of a specified age, the attainment of such age will not operate to terminate the coverage of a dependent who is and continues to be both incapable of self-sustaining employment by reason of mental or physical disability and who is dependent upon the covered employee for support and maintenance. Proof of the dependent's incapacity and dependency must be furnished to the insurer within 31 days of the dependent attaining the specified age and subsequently as may be required by the insurer, but not more frequently than annually after the two-year period following the child's attainment of the specified age (Insurance Law, Sec. 4235(f)(1)).
The 1999 legislature enacted a bill to add Sec. 3237 to the state insurance law. This provides at least one year of continuing health benefit coverage beyond the last day of attendance in school for a full-time student who is covered by the insurance policy of a parent or legal guardian if the student is ill and takes a medical leave of absence (S. 4055, L. 1999).
Qualifying events.- Coverage is triggered when an employee or member ceased to be insured under a group policy because of termination of employment or membership in the class eligible for coverage (Insurance Law, Sec. 3221(m)).
Conversion to individual policy.- Generally, an employee and dependents whose group coverage terminates because of termination of employment is eligible for conversion, so long as the employee was insured under the group policy for at least three months. The conversion privilege is also available to the surviving spouse of a deceased employee or the former spouse of a divorced employee. Conversion coverage is not available to a covered person if the person is eligible for similar benefit that, taken together with the converted policy, would result in overinsurance (Insurance Law, Sec. 3221(e)).
Notice.- Each certificate holder must be given written notice sent by first-class mail of the conversion privilege and its duration within 15 days before or after the date group coverage terminates (Insurance Law, Sec. 3221(e)).
Deadlines.- Application for conversion coverage must be made to the insurer within 45 days after group coverage terminates. If the notice of the conversion privilege is provided to the covered person more than 15 days but less than 90 days after the date of termination of group coverage, the time allowed to elect coverage must be extended for 45 days after such notice is given. If notice is not given within 90 days after the date group coverage terminates, the time allowed to elect coverage will expire at the end of such 90 days (Insurance Law, Sec. 3221(e)).
Premiums.- The premium required must be applicable to the class of risk to which the person covered belongs, the age of the person, and the form and amount of insurance provided (Insurance Law, Sec. 3221(e)).
Termination of coverage.- Continuation coverage may be terminated for any person who is covered by or is eligible for Medicare (Insurance Law, Sec. 3221(e)).
Duration of coverage.- Continuation coverage generally last for 18 months after group coverage terminates. For dependents whose group coverage terminated due to:
the death or divorce of the covered person;
dependent ceasing to be eligible under the plan; or
the covered person's eligibility for Medicare,
coverage will last for 36 months. An employee who is determined to be disabled at the time of termination of employment is entitled to coverage until the employee is not longer disabled, up to a maximum of 29 months of coverage (Insurance Law, Sec. 3221(m)).
Premiums: Continuation coverage.- The premium for continuation coverage must not be more than 102% of the group rate applicable on the due date of each payment (Insurance Law, Sec. 3221(m)).
Premiums: Conversion coverage.- The premium required must be applicable to the class of risk to which the person covered belongs, the age of the person, and the form and amount of insurance provided (Insurance Law, Sec. 3221(e)).
Termination of coverage: Continuation coverage.- Coverage will terminate if a premium payment is not timely made, the group policy is terminated, or the maximum period of coverage is reached (Insurance Law, Sec. 3221(m)(4)).
Termination of coverage: Conversion coverage.- Continuation coverage may be terminated for any person who is covered by or is eligible for Medicare (Insurance Law, Sec. 3221(e)).
NOTICE
Continuation coverage.- A notification of the continuation privilege must be included in each certificate of coverage (Insurance Law, Sec. 3221(m)(5)).
Conversion coverage.- Each certificate holder must be given written notice sent by first-class mail of the conversion privilege and its duration within 15 days before or after the date group coverage terminates. If the notice of the conversion privilege is provided more than 15 days but less than 90 days after the date of termination of group coverage, the time allowed to elect coverage must be extended for 45 days after notice is given. If notice is not given within 90 days after the date group coverage terminates, the time allowed to elect coverage will expire at the end of 90 days (Insurance Law, Sec. 3221(e)).
DEADLINES
Continuation coverage.- Continuation coverage must be elected in writing within the 60 day period following the later of (Insurance Law, Sec. 3221(m)(2)):
the date group coverage terminates, or
the date the employee is sent notice by first class mail of his or her continuation rights by the group policyholder.
Special enrollment period. An individual who does not have an election of continuation coverage in effect on the February 17, 2009, effective date of the American Recovery and Reinvestment Act of 2009, but who would be otherwise eligible for the new federal premium subsidy, may elect continuation coverage. The election must be made no later than 60 days after notice is provided by the group health plan or the insurer (as applicable). Notice of the stated extended election period must be provided by April 18, 2009 (60 days after ARRA’s date of enactment) (Insurance Law, Sec. 3221(m)(7), as amended by NY A 6740, enacted and effective March 20, 2009).
Conversion coverage.- Application for conversion coverage must be made to the insurer within 45 days after group coverage terminates. If the notice of the conversion privilege is provided to the covered person more than 15 days but less than 90 days after the date of termination of group coverage, the time allowed to elect coverage must be extended for 45 days after notice is given. If notice is not given within 90 days after the date group coverage terminates, the time allowed to elect coverage will expire at the end of 90 days (Insurance Law, Sec. 3221(e)).
PENALTIES
Under New York's health care continuation law, a policyholder (usually the employer) who has received notice that a person has elected continuation rights has 30 days after the receipt of premiums from such person to forward those premiums to the insurer, and to provide proof to the person that the premiums have been remitted. Failure to comply with this provision can result in a fine of up to $5,000, as well as the possibility of civil action (Labor Law, Sec. 217(6) and (7)).
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