Aug 21, 2024 | New York Labor Law, Compliance, Employee Benefits
Much like federal COBRA, New York State continuation coverage applies to employers with 20 employees or fewer and gives workers employed by employers with 20 or fewer employees the right to continue purchasing group health insurance after an event in which the employee would otherwise lose coverage.
The following article covers the employer requirements under New York State COBRA Law.
New York COBRA Overview
COBRA gives employees and their families who lose health benefits the right to choose to continue group health benefits provided by their group health plan. Those qualified for COBRA are considered “qualified beneficiaries.”
Certain circumstances may deem employees and their families eligible for COBRA. Circumstances include voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. These circumstances or events are considered “qualifying life events.”
COBRA Benefits and Costs
The qualified beneficiary who elects COBRA coverage is responsible for paying the cost of the coverage. Coverage may cost up to 102% of the applicable premium for a period of coverage time (usually 30 days). The 102% is 100% of the premium cost, plus a 2% administration fee (if applicable).
Qualified beneficiaries are entitled to elect to continue to receive coverage identical to what they were receiving under the plan.
Employers struggling with tracking COBRA-qualifying events and eligibility should look to benefits administration software as the advantages of benefits administration software include easier COBRA management.
Notifying Employees of COBRA Rights
Upon a qualifying life event occurring for a qualified beneficiary, employers are required to notify the individual/employee of their rights under COBRA. Employers have 30 days within the qualifying event to notify the individual. Employers should provide the individual with a COBRA election notice.
Qualified beneficiaries have 60 days to elect continuation coverage under COBRA.
How Long Does COBRA Coverage Last in
New York State?
Qualified beneficiaries are eligible to continue health coverage under Federal COBRA for 18 months. Those who are eligible may continue coverage under New York State’s continuation coverage for an additional 18 months, totaling 36 months of coverage when combining Federal COBRA benefits and NYS continuation benefits.
It is important to note that the NYS continuation coverage does not apply to benefit contracts that are not subject to New York State laws. Your benefits administrator or insurance company will be able to confirm which plans are not subject to the 18-month NYS continuation coverage.
NYS continuation coverage does not apply to self-funded plans, dental-only plans, vision-only plans, or prescription plans. These plans cannot be extended to 36 months of coverage. Federal COBRA does apply to dental-only plans, vision-only plans, and prescription plans; however, the total coverage will be up to 18 months. Employees will be able to continue a comprehensive plan that consists of medical and dental benefits for an additional 18 months, according to NYS.
When Does COBRA Not Apply?
COBRA benefits do not apply to plans that provide only life insurance or disability benefits. COBRA only covers group health plans that are sponsored by an employer (private-sector or state/local government).
COBRA does not apply when an employee is out on FMLA or NYS Paid Family Leave. FMLA and NYSPFL require employers to continue health care benefits for the employee during the covered leave period.
Get Help with New York State COBRA Law
If you are interested in outsourcing your HR services to our proficient team of HR specialists to create custom offboarding packages for you, then it may be time to look into a New York HR Outsourcing Service. A New York HR Service Company can handle things such as separation letters, unemployment notices, and COBRA notices for you.
If you are interested in learning more about our HR services or assisting with your offboarding package needs, including the preparation of COBRA notices, please contact us today.