Minnesota Adds Additional State Subsidy - COBRA Premiums

8/3/2009

The state of Minnesota recently added a new provision in their state human services bill to provide an additional state subsidy to cover 35% of COBRA premiums for certain low income individuals living in Minnesota, who are also eligible for the federal COBRA subsidy. To collect the state subsidy, an individual must:

> Sign up for COBRA health care coverage on a timely basis, AND
> Be eligible for the federal COBRA subsidy, AND
> Meet the income and asset limits for a Minnesota health care program.

The law requires employers with fully-insured plans in Minnesota to add new information to COBRA notices provided to employees residing in Minnesota. (It is unclear if under ERISA self-funded employers are required to add the language to their COBRA notices.) However, since Minnesota will provide the subsidy to individuals regardless of the type of plan they are enrolled in, it is recommended that the notices go out to all that are ARRA eligible in the state of Minnesota.

The Minnesota Department of Human Services (DHS) has posted an application for the subsidy on their website (http://www.dhs.state.mn.us) and will pay the subsidy directly to the employer if someone elects it. The employer would then be required to provide COBRA to the eligible individual at no cost for as long as the individual is eligible for the federal COBRA subsidy.

The additional Minnesota-based subsidy will be provided by the state on a prospective basis from the first month after the submission of the application or the first month after the approval of their application through the end of what is left of the qualified beneficiary's Federal ARRA subsidy. Discovery Benefits is working with its software vendor to add the required insert for Minnesota residents and will be in contact with its clients and qualified beneficiaries regarding this new notification.

Categories: COBRA