18.1 Introduction
Library | Employment Law in Virginia (Virginia CLE) (2020 Ed.) |
18.1 INTRODUCTION
18.101 Purpose. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) 1 is remedial legislation enacted to address concern about "reports of the growing number of Americans without any health insurance coverage and the decreasing willingness of our nation's hospitals to provide care to those who cannot afford to pay." 2
18.102 Availability and Premiums. COBRA amended the Employee Retirement Income Security Act (ERISA), 3 the Internal Revenue Code, 4 and the Public Health Service Act (PHSA) 5 to require covered employee group health care plans to offer temporary continuation of coverage at group rates on a self-pay basis to qualified participants and beneficiaries who would otherwise lose coverage. 6 The employer is allowed to charge the qualified beneficiary for COBRA coverage, but the maximum charge is limited to 102 percent of the employer's cost of coverage of active employees. 7 COBRA coverage lasts up to 36 months (18 months in case of termination of employment or reduction in hours) following the date of the "qualifying event." 8 The American Recovery and Reinvestment Act of 2009 (ARRA), as amended, created a temporary 65
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percent COBRA premium subsidy for employees involuntarily terminated between September 1, 2008 and May 31, 2010. 9
18.103 Other Federal Health Care Legislation and Rules.
A. Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Health Insurance Portability and Accountability Act of 1996 (HIPAA) 10 expanded several COBRA rules. 11 Section 421 of HIPAA changed COBRA rules concerning disability extension, the definition of qualified beneficiary, and the duration of COBRA continuation coverage. HIPAA amended the COBRA rules in ERISA, the PHSA, and the Internal Revenue Code for covered private and state and local government employers. 12 Aside from these COBRA-specific amendments, HIPAA generally limits the ability of group health plans to impose pre-existing condition limitations and permits periods of prior health coverage to offset pre-existing condition limits in a new plan. Prior to the Patient Protection and Affordable Care Act (PPACA), 13 HIPAA required that group health plans, whether or not the employer was subject to COBRA, provide certificates of coverage to persons who ceased to be covered for any reason. Certificates of coverage were used by individuals to offset a new plan's pre-existing condition limitation, if any. With PPACA's elimination of pre-existing condition limits for plan years beginning on or after January 1, 2014, HIPAA's certificates of coverage requirements became obsolete, and final regulations have been issued clarifying that certificates of creditable coverage are no longer required after December 31, 2014. 14
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Under HIPAA, coverage cannot be denied on the basis of "healthrelated factors" (health status, medical condition, claims experience, receipt of health care, medical history, genetic information, disability, or evidence of insurability). 15 Premiums or contributions cannot be based on health status, but plans may provide limited discounts or rebates based on adherence to "wellness" programs. 16 Final rules on HIPAA "nondiscrimination" 17 and "wellness" programs 18 were issued on December 13, 2006. In 2013, regulations were issued to address PPACA's modifications to the wellness program requirements. 19
B. Genetic Information Nondiscrimination Act (GINA). The Genetic Information Nondiscrimination Act (GINA) 20 prohibits health insurers, health plans, and employers from discriminating on the basis of "genetic information" (which includes family medical history), limits the ability of those entities to request genetic information, and imposes confidentiality requirements on genetic information required by those entities. Title I of GINA amends ERISA, 21 the Internal Revenue Code, and the PHSA and went into effect May 21, 2009 for plan years beginning after that date. Title II of GINA 22 broadens the protections afforded by title VII and the Americans with Disabilities Act, to prohibit employers (i) from discriminating against employees based on their genetic information, (including family medical history), and (ii) from acquiring employees' genetic information except under limited circumstances. Title II became effective November 21, 2009.
C. Patient Protection and Affordable Care Act (PPACA). The Patient Protection and Affordable Care Act, along with its companion statute, the Health Care and Education Reconciliation Act of 2010 (referred to collectively as PPACA) 23 is a sweeping piece of health care legislation intended
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to expand health...
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