Pennsylvania Adopts Mini-COBRA Requirements for Small Employers with Insured Medical, Hospital, or Surgical Benefits

Federal COBRA rules only apply to employers with 20 or more employees. However, 39 states and the District of Columbia have various mini-COBRA rules in their state insurance codes that apply to small businesses (usually those with 2 to 19 employees) that provide medical benefits to their employees. These rules tend to be similar to, although often not exactly like, federal COBRA rules. Some of the state COBRA rules also apply to larger employers that purchase insured benefits (such as parts of the CAL-COBRA rules or the recent New York 36-month continuation legislation) or employers (such as churches) that are not subject to the ERISA rules that generally preempt state insurance laws.

The American Recovery and Reinvestment Act of 2009 (ARRA) introduced a 65% assistance payment for individuals who are involuntarily terminated from employment and extended the 65% assistance to state mini-COBRA rules. Further, to the extent provided under state law, the ARRA second-chance election opportunity is also available for individuals subject to the state mini-COBRA rules, and, to date, approximately 17 states (including California, Illinois, and New York) have expanded their mini-COBRA rules to permit the second-chance election and another four states permit the second-chance election through regulations.

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