Congress Extends COBRA/ARRA Eligibility Cutoff Date for Premium Subsidy to May 31, 2010 and Broadens Coverage Beyond Involuntary Termination to Include Reductions of Hours

Effective April 15, 2010, the 65 percent COBRA premium subsidy program that originally took effect in early 2009 will remain available until May 31, 2010. On April 15, 2010 the President signed into law the Continuing Extension Act which extends by another 61 days, through May 31, 2010, the COBRA subsidy eligibility program, as well as several other federal programs. [Previously, Congress tentatively extended this deadline to June 30, 2010 but this later extension was reversed in the final hours of the Congressional debate. Congress is expected to extend the subsidy program further in tandem with passage of jobs stimulus bills.]

Under current law, an employee who experienced an involuntary termination on or after September 1, 2008 and before June 1, 2010, or experienced a reduction in work hours followed by involuntary termination between March 2 and May 31, 2010, is eligible to receive a 65% subsidy toward the cost of health insurance coverage for up to 15 months, provided the employee participates in a group health insurance plan covered by COBRA or in a plan covered by an eligible state mini-COBRA law. In the case of an employee who experienced a reduction in hours followed by an involuntary termination between March 2 and May 31, 2010, during the 60-day period beginning on the date of the involuntary termination, plan administrators must provide an additional general COBRA notification that explains the rules for loss of coverage owing to a reduction in hours. There is no premium reduction for periods of coverage that began prior to February 17, 2009.

When an employee separates from employment, generally employers that are subject to COBRA must offer the terminated employee, and any family members who are covered by the group health plan, the opportunity to purchase insurance continuation coverage at the employee’s expense, generally for up to 18 months after the qualifying event, which includes most employment terminations. The American Recovery and Reinvestment Act of 2009 (ARRA) eased this financial burden by providing a financial subsidy to any involuntarily terminated employee and his or her dependents consisting of 65 percent of the cost of COBRA premiums for up to nine months.

The original nine-month subsidy period was enlarged to 15 months by the Department of Defense Appropriations Act of 2010 (DODA 2010) which took effect on December 19, 2009. Employees and family members who at the time of the original February 17, 2009 COBRA amendment were eligible for nine months of premium subsidy may now receive up to 15 months of premium subsidy.

Former employees and dependents whose first nine months of premium subsidy expired before DODA 2010 took effect have the opportunity to receive up to six more months of premium subsidy provided they pay their 35 percent share of any unpaid premiums.

Former employees who continued to pay for their COBRA continuation coverage after their first nine months of premium subsidy ended and before enactment of DODA 2010 may receive a credit or a refund equal to 35 percent of the premium costs they paid, subject to the new overall 15-month limit.

DODA 2010 requires plans to notify certain current and former group health insurance plan participants and beneficiaries about the new rules on premium subsidy. To assist employers and employees with the new requirements, the Labor Department posted updated model notices at http://www.dol.gov/ebsa/COBRAmodelnotice.html. A notice must be provided to any employee who was terminated on or after September 1, 2008 and has not already received notice of his or her rights under either the COBRA law, the February 2009 ARRA amendments, DODA 2010, the March 2010 Temporary Extension Act, or the Continuing Extension Act. A separate notice must be sent to any former employee who on or after October 31, 2009 either was eligible for a premium subsidy or terminated employment.

Congress Extends COBRA/ARRA Eligibility Cutoff Date for Premium Subsidy to May 31, 2010 and Broadens Coverage Beyond Involuntary Termination to Include Reductions of Hours

Author: Patrick W. McGovern

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Effective April 15, 2010, the 65 percent COBRA premium subsidy program that originally took effect in early 2009 will remain available until May 31, 2010.  On April 15, 2010 the President signed into law the Continuing Extension Act which extends by another 61 days, through May 31, 2010, the COBRA subsidy eligibility program, as well as several other federal programs.

Angelo J. Genova to Speak at 2010 Meeting of National Democratic Lawyers Council

Angelo J. Genova will speak before the National Democratic Lawyers Council on Saturday, April 24th in Washington, D.C. Mr. Genova, along with other nationally prominent seasoned election law litigators, will discuss the impact of voter protection efforts on campaigns, election activity best practices and share experiences on litigating election law cases.

Click here for more information about this event.

Recent Health Care Reform Legislation Impacts Patients, Insurers, Employers and Providers

On March 23, 2010, President Obama signed into law the Patient Protection and Affordability Reconciliation Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively the “Act”). The Act is one of the most comprehensive pieces of health care legislation to be enacted in decades. The legislation calls for the implementation of a number of new health care coverage and patient rights’ initiatives in 2010, including the following:

  • Prohibition of pre-existing coverage exclusions for children by health insurers;
  • Access to affordable coverage for the uninsured with pre-existing conditions;
  • Institution of patient protections, including choice of physician, removal of preauthorization requirements for ob-gyn visits, and increased access to emergency care;
  • Extension of health insurance coverage for young adults on family policies until age 26;
  • Allowance for free prevention and wellness benefits in all new plans and Medicare;
  • Access to quality care for vulnerable populations through an investment in Community Health Centers;
  • Elimination of lifetime limits on coverage and regulation of annual limits;
  • Protection against recissions of existing coverage except in instances of fraud or intentional misrepresentation;
  • Availability of health insurance consumer information to assist individuals with the filing of complaints and appeals, enrollment in health plans, and other issues;
  • Increase in the number of primary care providers through investments in training programs; and
  • Implementation of a new, voluntary, long-term care insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become disabled.

In addition to the above initiatives that will impact patients, insurers, employers and providers alike, the Act has certain provisions that are of particular interest to health care providers. Among these are amendments to existing criminal, civil, and administrative fraud and abuse statutes intended to aid in reducing health care fraud and abuse and increase government health care program integrity.

For example, Section 6409 of the Act instructs the Secretary of Health and Human Services (“HHS”) to collaborate with the Office of the Inspector General (“OIG”) to develop and implement a self-referral disclosure protocol for actual and potential Stark law violations within six months from the date of enactment. This represents a departure from the OIG’s March 24, 2009 Open Letter to Health Care Providers which made clear that the OIG would no longer accept disclosure of a matter that involves liability under the Stark law alone. The new legislation also clarifies the ambiguity that existed as to whether there was any room to reduce or compromise amounts owed for violations under the Stark law. Section 6409 expressly authorizes the Secretary of HHS to compromise payment and penalty amounts due and owing for Stark law violations.

Section 6003 of the Act amends the Stark law in-office ancillary services exception. This Section imposes a requirement on referring physicians to inform patients in writing that they may obtain certain designated health services from a person other than the referring physician or related physician. This provision was technically effective on January 1, 2010, but could not be enforced until the law was passed on March 23, 2010.

Further, Section 6001 of the Act significantly impacts physician ownership in hospitals. It effectively bars future physician investments in hospitals and imposes substantial limitations and restrictions to the Stark law exception that permits physicians to have ownership interests in hospitals if they meet the whole hospital exception. Although this Section grandfathers existing hospitals, it places restrictions on future actions and expands disclosure requirements.

The Act also has brought about changes in the federal Anti-Kickback statute. Notably, the Act amends the specific intent requirement judicially recognized under the Act to now provide that a person may violate the Anti-Kickback statute without actual knowledge of a violation or specific intent to violate the statute. In addition, the Act amends the Anti-Kickback statute to clarify that claims for services resulting from a kickback constitute a false claim under the Federal False Claims Act.

Finally, the False Claims Act has been impacted under the Act as well. Prior to the Act, a key defense against qui tam lawsuits was to argue that a whistleblower’s complaint is based on publicly available information. Under the new law, the definition of what constitutes publicly available information has been narrowed and the requirement that a qui tam relator have direct knowledge of the facts underlying the allegations has been removed. It is now sufficient for a qui tam relator’s allegations to be based on indirect or secondhand information, provided those allegations add to whatever information is already contained in the public domain.

The foregoing are just a few examples of a variety of provisions of the Act that may impact our firm’s clients. The Act will continue to be clarified as accompanying regulations are developed by government agencies in the future. We will continue to provide our clients with updates on specific portions of this comprehensive legislation as warranted in future alerts.

For additional information, please contact Celia S. Bosco or Christina B. Murphy

Recent Health Care Reform Legislation Impacts Patients, Insurers, Employers and Providers

Publication: GBG LAW

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On March 23, 2010, President Obama signed into law the Patient Protection and Affordability Reconciliation Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively the “Act”).  The Act is one of the most comprehensive pieces of health care legislation to be enacted in decades.  The legislation calls for the implementation of a number of new health care…

Jennifer Mazawey to Speak on Rights and Responsibilities of Property Owners at New Jersey Business & Industry Association Seminar

Counsel Jennifer Mazawey will speak at the New Jersey Business & Industry Association’s seminar entitled, “NJ’s New Site Remediation Program, What Property Owners and Professionals Need to Know.” This seminar will discuss both the practical and legal implications of the State’s Site Remediation Reform Act (SRRA) and the Licensed Site Remediation Professional (LSRP) Program. The seminar will be held on April 16th, from 8:30 a.m. to 12:30 p.m., at The Pines Manor in Edison, NJ.

Click here for more information or to register for the event.

The New York Times Reports on Acquittal of Manhattan Surrogate’s Court Judge; Laurence Laufer Quoted

Last week, a jury acquitted a judge in Manhattan Surrogate’s Court and her former law partner of felony charges of filing false campaign reports.  The New York Times report on the verdict took note of Laurence D. Laufer’s role in advising the defense and quoted him on the implications of the case for New York campaign finance law.  Mr. Laufer is the director of the Genova Burns & Giantomasi Corporate Political Activity Law Practice Group.

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