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Amendment to COBRA allows longer coverage period

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Assemblyman Alan Maisel announced the Assembly has passed an amendment to the COBRA benefits law allowing a group of individuals who were covered at the time the law became effective %u2013 yet were unable to receive the extension if their benefits expired before their contract was renewed %u2013 to continue receiving coverage (A.40006).

The original law, passed in June, extended COBRA benefits from 18 to 36 months for individuals whose policies were issued or renewed after July 1 of this year (Ch. 236 of 2009).

“With the national unemployment rate at a 26-year high, an increasing number of workers are experiencing extended periods of job loss or being forced to work part-time,” Maisel said. “The result is a loss of group health insurance coverage that these workers cannot afford.”

The original law extended health insurance coverage offered through COBRA, but the timeframe for renewing certain contracts inadvertently disqualified a number of individuals. This chapter amendment ensures that these struggling New Yorkers continue to receive the health benefits they need.

The chapter amendment:

* Provides a special enrollment period for this group of individuals to receive benefits;

* Requires coverage issued during the special enrollment period to be prospective;

* Provides up to a total of 36 months of benefits;

* Prohibits any pre-existing condition exclusions from applying to lapses in coverage;

* Allows insurers 30 days to make a reasonable effort to provide written notice of the special enrollment period;

* Gives those individuals who receive notice 60 days to enroll and those who do not receive notice six months from the immediate effective date; and

* Changes the effective date from the reliance upon renewal to a flat effective date for all policies and contracts on or after Nov. 1, 2009.

COBRA allows workers and their families who lose their health benefits %u2013 because of voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce or other life-altering events %u2013 the right to continue their health benefits provided by their group health plan for a limited period of time.

As companies downsize, older workers are often offered early retirement options as an alternative to lay-offs. These individuals may not have retiree health benefits and can be years away from Medicare. This bill allows these individuals to maintain their existing coverage for a longer period of time, without which they would be uninsured after 18 months.

“Providing New Yorkers with coverage, particularly if their employment status is reduced, is a priority,” Maisel said. “This extension ensures that affordable health insurance coverage is available to those who need it.”

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