New Delaware Mini-COBRA Law

Posted by BAS - 07 June, 2012

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The State of Delaware enacted a temporary mini-COBRA law, joining several other states that require continuation of group health coverage for insured, small employer group health plans. Beginning June 21, 2012, participants in small-employer health plans in Delaware may be eligible for continuation of health coverage for up to 9 months upon the occurrence of certain qualifying events. The law specifically provides that it will not be in effect if the Affordable Care Act is deemed unconstitutional by the United States Supreme Court, and it is intended to expire January 1, 2014.

The Delaware mini-COBRA law applies to insured plans of employers that normally employed between 1 and 19 employees on a typical business day during the preceding year. Continuation coverage is available for medical coverage only.

Qualifying events for continuation coverage mirror those under the Federal COBRA rules. Specifically, a qualifying event includes

  • Death of a covered employee;
  • Termination of employment (other than for gross misconduct);
  • Reduction of hours;
  • Divorce or legal separation;
  • Entitlement to Medicare;
  • Dependent child ceasing to be an eligible dependent child under the plan; and
  • Bankruptcy.

The right to continuation coverage is available to individuals who were covered under the group policy for three months prior to the qualifying event. It is not available to anyone who

  • Is covered or eligible for coverage under Medicare;
  • Is eligible for other employer-based health coverage as an eligible dependent; or
  • Is or could be covered under any other group medical coverage that the person was not covered under immediately prior to termination (except Delaware medical assistance).

An employer is responsible for notifying an employee of continuation coverage rights within 30 days of a qualifying event. The eligible employee (or dependent) has 30 days after receiving notice to elect coverage. Unless otherwise specified in the election form, an election by one person eligible for continuation coverage is considered to be an election for all eligible continuants. Payment for coverage must be made by the end of the month of coverage. The amount charged for coverage may not exceed 102% of the premium for coverage.

The law takes effect June 21, 2012 and is set to expire January 1, 2014. Employers in Delaware with less than 20 employees, or small employers with insurance plans issued in Delaware should gear up to implement the new continuation coverage requirements. For more information or to engage BAS' COBRA Control Services to assist with COBRA administration, please contact sales@BASusa.com.

Topics: HR & Benefits Compliance


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