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New Jersey Comments on New Jersey Mini-COBRA

Posted in Welfare Plans

The COBRA subsidy portion of the American Recovery and Reinvestment Act includes a provision applying the 65% subsidy to state continuation programs, frequently referred to as "mini-COBRA."  These state provisions apply to groups with fewer than 20 employees that are not regulated by federal COBRA.  New Jersey has state continuation coverage for groups with fewer than 20 and the state Department of Banking & Insurance has issued its own guidelines on its continuation program and the subsidy.  There are two links, one for the State 2009 Recovery and Reinvestment Plan, and one from the Department of Banking & Insurance dealing directly with the subsidy.

Some key things that I picked out in these notices clarify how New Jersey mini-COBRA will be subsidized.  First, it is pretty clear that the state anticipates that the subsidy for these smaller plans will be handled directly through their insurance carriers.  Second, it will definitely not apply to the those dependents who are eligible for continuation as a result of the Age-30 extension.  New Jersey also clarifies that the subsidy will not apply to those who lost coverage as a result of reduction of hours. 

There were also two additional comments that jumped out at me.  New Jersey continuation is generally not available to those who were terminated "for cause."  Arguably, that means that those who were terminated for cause would not be eligible for the subsidy because they would not be eligible for the continuation coverage under state law.  This does not mean they could not apply for the subsidy, but it does appear that they would not receive it.  I expect multiple appeals on this issue.  Second, civil union participants are likely not eligible for the subsidy because, while recognized as participants in New Jersey, they are not recognized by federal law and would not be subsidy eligible individuals.  But the department has cautioned they are awaiting more guidance on this issue.

If you are subject to New Jersey mini-COBRA, I highly recommend you talk to your insurance provider to make sure they have all of the information they need from you to administer the subsidy program.