The American Recovery and Reinvestment Act of 2009 (ARRA) was signed into law on February 17, 2009. It provides individuals who were/are involuntarily terminated from their employment between September 1, 2008, and December 31, 2009, with an opportunity for reduced premiums for continuation coverage. The reduction in premium, or premium subsidy, for continuation coverage can last up to nine months.

Individuals who are involuntarily terminated as described above, may receive a subsidy of 65% of the premium for continuation coverage during the eligible period. The balance of the premium, 35%, remains the responsibility of the terminated individual who is referred to as an Assistance Eligible Individual. For groups of less than twenty employees, New Jersey requires that the insurer of the group health plan be responsible for advancing the 65% subsidy. The insurer is able to recover the 65% subsidies through credits to its payroll taxes.

In order to comply with the ARRA, AmeriHealth must mail a notice about the opportunity for a premium subsidy to all Assistance Eligible Individuals who were covered by AmeriHealth since September 1, 2008. Notice must be provided to Assistance Eligible Individuals by April 18, 2009.

After an Assistance Eligible Individual is provided notice about the premium subsidy, he/she must complete assistance request forms to obtain the subsidy. Once the forms are completed, the Assistance Eligible Individual is required to send the forms to his/her former employer for verification of termination status. After the former employer has completed the verification, the employer must submit the Assistance Eligible Individual’s verification and other documentation to AmeriHealth. AmeriHealth will process the application packet and provide the 65% subsidy to those who qualify.

To view our terminated member communications, click here.

State and federal regulators expect insurers and employers who are requested to supply information on terminated employees to cooperate and act as quickly as possible so that Assistance Eligible Individuals can obtain premium relief. To expedite the subsidy verification process, AmeriHealth is requesting the assistance of your clients to review lists of individuals who according to our records have been terminated from AmeriHealth plans. These lists are currently being mailed to groups in hopes of having them returned to us as soon as possible. Groups are also asked to identify other individuals who have been involuntarily terminated from AmeriHealth plans since September 1, 2008, but are not identified on our initial lists.

To view our small-group employer letter, click here.

To read more about ARRA eligibility requirements and how ARRA applies to New Jersey small employers, click here.

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