NJ Groups No COBRA - Frotton CPA
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NJ Groups No COBRA

NJ Groups No COBRA

Q&A for Federal Stimulus for New Jersey Groups Not Subject to COBRA (2009)

How do individuals sign up for the premium reduction?

For employer groups subject to New Jersey Continuation, the carrier is required to send a notice to terminated employees so that the former employees whose employment was/is terminated between September 1, 2008 and December 31, 2009 can elect to continue their group coverage and receive the premium reduction.  This is different than for COBRA eligible groups where the employer is required to send the notice.

Does the employer have to do anything for New Jersey Continuation?

Yes.  Although the employers do not send the notice for New Jersey Continuation, the employers nevertheless have a significant role.

First, whenever an employee ceases to work 25 or more hours per week the employee ceases to be eligible for coverage as a full time employee.  This is the case whether the employer terminates the employee’s employment, the employee resigns, has a reduction in work hours, or goes out on disability.  Employers should immediately notify the carrier that the employee is not eligible for coverage as of a specific date.  By notifying the carrier promptly, the carrier will be in a position to provide the notice required under ARRA.

Second, employers must cooperate with the carriers to verify whether a former employee who elected the premium reduction was in fact involuntarily terminated between September 1, 2008 and December 31, 2009.

Third, if an employer no longer offers group coverage through the carrier whose plan was in effect on the date an employee was involuntarily terminated the employer must provide information regarding whether there is replacement coverage.  If there is replacement coverage, the former employee’s New Jersey Continuation option will be under the replacement carrier’s plan.  The employer must provide a copy of the election form to the replacement carrier.

To view all the changes and the new information

Federal Stimulus for New Jersey Groups Not Subject to COBRA

UPDATED http://www.state.nj.us/dobi/division_insurance/arra.html