Walsh Benefits - Carrier Facts

Aetna Federal COBRA/State Continuation Updates
4/13/2009

Federal COBRA/ State Continuation Updates
As you are 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 programs, and in the services Aetna offers to these employer groups.

This communication addresses:

The discontinuation of Aetna HMO COBRA Home Billing Services.
Federal and state continuation requirements for our Small Group market.

Discontinuing Aetna HMO COBRA Home Billing Services
As a result of the COBRA-related changes, we will no longer be able to offer our HMO COBRA Home Billing service, effective May 1, 2009. This service provided COBRA eligibility maintenance and billing to our HMO customers upon request at no additional charge.

Employer Notification
Those employers who elected our COBRA Home Billing Service will be notified this week of the discontinuation. This notice also provides the option for Aetna, or the employer to administer those services. The mailings will include a list of the names and addresses of customers and members currently being home billed if applicable.

Specific letters will be distributed depending on the size of the employer group:

300+ group size
51–299 group size with Aetna COBRA brochure
20–50 group size with Aetna COBRA brochure
1–19 group size in the states where Aetna is required to administer state continuation* for the employer - States include AR, CA, FL, KS, KY, MD, MS, NE, NH, NV, OK, RI, and VT.
1 – 19 group size in the states where the employer is required to administer state continuation* - States include CO, CT, GA, HI, IA, IL, IN, LA, MA, ME, MN, MO, NJ, NY, NM, NC, ND, OH, OR, SC, SD,TN,TX, UT, VA, WA, WV, WI, WY and DC.
1-19 group sizes in the states that have no continuation* –States include AK, AL, AZ, DE, ID, MI, MT, and PA.

*State designations are subject to change.

Federal and State Continuation Requirements
Employers with 20 or more employees
Federal COBRA rules apply to group sizes over 20 employees who maintain group health plans. Employers are responsible for administering COBRA, although they may designate another organization (such as Aetna) to administer the program for them. As a result of the ARRA, employers are responsible for funding the subsidy, and are reimbursed through a payroll tax credit.

Employers with less than 20 employees
Many states require 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. In addition, 13 states require that the carrier handle the administration of state continuation, while 30 states require the employer to administer state continuation. (The remaining balance of 8 states are not affected by this legislation).

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

State Continuation Employer Mailings
Mailings to employer groups with less than 20 employees to assure compliance with the ARRA are underway and will be distributed this week. One set of mailings is aimed at employers in 13 states where Aetna must administer the state continuation. Another set is aimed at employers in 30 states where the employer must administer the state continuation. In both cases, Aetna needs to record terminated employee names and addresses and is responsible for applying for the payroll tax credit for the ARRA subsidy.

States where the employer administers state continuation
In the following states, the employer is responsible for administering state continuation*: CO, CT, GA, HI, IA, IL, IN, LA, MA, ME, MN, MO, NJ, NY, NM, NC, ND, OH, OR, SC, SD,TN,TX, UT, VA, WA, WV, WI, WY and DC. Aetna employers in these states will receive the following materials:

Employer letter explaining the subsidy
Instructions sheet requesting information
Employer Attestation - ARRA Employee Subsidy – Form
ARRA State Continuation Coverage Supplemental Notice for the employer to distribute to individuals on state continuation

States where Aetna administers state continuation
In the following states, Aetna administers state continuation*: AR, CA, FL, KS, KY, MD, MS, NE, NH, NV, OK, RI, and VT. Aetna employers in these states will receive the following materials:

Employer letter explaining the subsidy
Instructions sheet requesting information
Employee on State Continuation Form
Employer Attestation - ARRA Employee Subsidy - Form
ARRA State Continuation Coverage Supplemental Notice for the employer to distribute to individuals on state continuation

*State designations are subject to change.

For more information, please contact your Aetna sales executive. Thank you for your continued support of Aetna.

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