Travis Software Official Blog

As part of the definitive trend we covered in our last newsletter, states are enacting legislation affecting State Continuation. Minnesota has created a program to help subsidize the 35% of premiums not paid for by ARRA, although the QB interacts directly with the state government. Nevada has reduced the maximum administrative fee allowable from 125% to 110%. Read below for details and how we are planning to change TravisCobra and WebCOBRA.

Updated: 9/08/2009 – changed to reflect availability in the TravisCobra system.

Minnesota

In the Minnesota law, residents of Minnesota who qualify as an Assistance Eligible Individual (AEI) under ARRA may, if they fall under certain income and asset limits, be eligible to have the state pay the 35% COBRA premium that the AEI would otherwise have to pay.

In other words, individuals who can prove that they have qualified for ARRA and enrolled in continuation coverage (Federal COBRA or MN state continuation) may submit an application to the Minnesota state government for this further assistance. Once approved, the state will send the 35% of the premium payment directly to the employer or plan administrator, not to the individual.

There are some unanswered administrative questions in the state law, such as, “What happens if the state-paid portion of the continuation coverage premium is paid or received after the end of a payment grace period?” However, the law appears to be a genuine attempt on the part of the state to allow low-to-moderate income residents of Minnesota who lose coverage and qualify for ARRA to have their coverage entirely paid by a coordination of Federal and state subsidies.

More information on the Minnesota law can be found here:

• Minnesota Department of Human Services
• Minnesota COBRA Premium Subsidy Application

Some of the changes that we will be making to the TravisCobra and WebCOBRA.com system in order to accommodate the change in Minnesota law include:

• Adding specific wording to the COBRA Election Notice, similar to the wording listed here, that goes to anyone residing in Minnesota that provides them with information about the existence of the availability of a 35% subsidy if they qualify, and how they may contact the State to apply for the benefit. You will, of course, be able to modify the new wording through the use of the Custom Letter Writer in TravisCobra or the Internet Word Processor in WebCOBRA.com.
• Adding a “check-box” to both systems that will signify that an individual has been approved for the state subsidy, so that once they inform you of that fact you will have a place to note it within the system.

Nevada

The change in the Nevada State Continuation Law involves altering the administrative fee limit to 10%, instead of the previous 25%

You can find the specific wording for this change under Assembly Bill No. 546.

Users who currently administer Nevada State Continuation should review the administrative fees set in your Nevada plans and reset the limit to no more than 10%. This change may be done now, without waiting for new versions of the TravisCobra and WebCOBRA.com systems to be made available to you.