State Continuation Updates:

As you may be aware, the American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65-percent subsidy on federal COBRA and COBRA-comparable state continuation premiums for certain assistance eligible individuals (AEIs) for up to nine months. This results in significant changes in how employers who maintain group health plans administer their COBRA or COBRA-comparable sate continuation programs.

Employers with less than 20 employees

New Jersey requires continuation of group coverage for terminated employees for group sizes under 20 lives. The ARRA mandates the subsidy for these members as well, but requires carriers, such as Aetna, to fund the subsidy, and then be reimbursed through the carrier’s payroll tax credit.

Aetna is making the necessary process changes to enroll assistance eligible individuals in state continuation, accept the 35 percent premium payments and administer the premium subsidy, where applicable.

State Continuation Employer Mailings

Aetna’s mailings to employer groups with less than 20 employees to assure compliance with the ARRA are underway and will be distributed this week. The purpose of the mailing is to obtain the necessary information to assist Aetna in obtaining terminated employee information in relation to the payroll tax credit for the ARRA subsidy.

Aetna’s mailing will include the following documents:

Employer letter explaining the subsidy

Instructions sheet requesting information

Employer Attestation ARRA Employee Subsidy Form this should be completed only for those former employees who qualify for the subsidy and have elected continuation of coverage

ARRA State Continuation Coverage Supplemental Notice for the employer to distribute to individuals on state continuation

Please contact your Stratford Financial Group sales representative or account manager if you have any questions about these changes.