PA Mini-Cobra for small business

[Andy0192]

What is the name of your state (only U.S. law)? Pennsylvania

This is a Mini-Cobra issue.

Employer had 5 full-time employees. 3 had Health Insurance through the employer, the other 2 full-time employees had Insurance through their spouse's employers.

2 of the employees got laid off March 30th, 2010 due to lack of work. Both of those employees had Health Insurance through the employer, and chose to extend their coverage through the PA Mini-Cobra plan, with Premium Assistance being offered through the ARRA (Stimulus act).

The Health Insurance company has now made a ruling that says the company only has 1 Employee covered on the Group plan, and is therefore no longer a Group. Coverage has been denied to the 2 people who applied for the Mini-Cobra, saying the company's Group plan is no longer valid.

Note: Both former employees were laid off on March 30th, 2010. Insurance premiums had already been paid through April 30th, 2010. The employer has not yet received any notification that coverage has been terminated for the Group Plan.

Any input from someone with experience in this type of situation? The former employees are understandably upset that not only have they lost COBRA premium assistance, but they also have apparently been cancelled from the ability to go under COBRA even at full payment.What is the name of your state (only U.S. law)?

 

[cbg]

This was not an arbitrary decision by the health insurer; the PA mini-Cobra law specifically states that a group must have at least two employees before the law applies. The insurer had no choice in the matter; the group did not meet the requirements for the PA mini-COBRA.

 

[Andy0192]

The "group" still has 3 people paying premiums. 1 is currently employed, 2 are laid off, but eligible for re-hire and paying their premiums.

I see your point, I just don't see how the employer is automatically cancelled for insurance the moment they lay off 2 out of 3 people who were part of the "group".

This seems like a catch 22. PA Mini-Cobra is supposed to apply to any employer with 2+ employees. I can believe that the Insurance carrier would cancel the "group" plan at the next policy renewal date if there are less than 2 employees being covered. I can't quite understand how it becomes a retro-active cancellation at the moment that 2 people get laid off.

 

[justalayman]

=Andy0192;2541703]The "group" still has 3 people paying premiums. 1 is currently employed, 2 are laid off, but eligible for re-hire and paying their premiums.

if they are laid off, they are not employees.

If you do not have coverage until the end of April, request a refund of any unused premiums.