Massachusetts Mini COBRA Health Insurance information and laws

The Massachusetts small group continuation of coverage law (Mini-COBRA) requires small group carriers to provide for the continuation of health benefits to employees of small businesses with 2-19 employees. The Mini-COBRA law (G.L. c. 176J, § 9) was enacted in August 1996 and amended the Massachusetts small group health insurance law to require small group health carriers to provide continuation of coverage benefits which are similar to those required by the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). Mini-COBRA allows employees and their family members to continue coverage on their small group health benefit plan and pay group rates for certain time periods under circumstances where they previously would have lost coverage.

Small group carriers may require small employers/intermediaries to help with the administration of Mini-COBRA in the provision of certain notices and in collecting premiums. Please see Sections 2 and 4 for more information on notices and premiums.

While COBRA and Mini-COBRA are similar, they are not identical and do contain differences. Some differences include:

COBRA is a federal law and is not enforced by the Division of Insurance (see Section 7 below). Mini-COBRA is a state law and is enforced by the Division of Insurance.
COBRA generally applies to group health plans offered by employers with 20 or more employees. Mini-COBRA applies to small group health benefit plans issued to employers with 2-19 employees.
COBRA applies to self-funded plans and group health plans offered by employers with 20 or more employees. Mini-COBRA does not apply to self-funded plans.

1. Qualified Beneficiaries and Qualifying Events under Mini-COBRA

Mini-COBRA benefits must be provided to Qualified Beneficiaries upon the occurrence of a Qualifying Event. Qualified Beneficiaries are generally individuals who are covered under a small group health benefit plan on the day before the Qualifying Event. Qualified Beneficiaries can be:

an employee
the spouse of an employee
the dependent child of an employee¹

Qualifying Events are events which would cause a Qualified Beneficiary to lose health coverage if Mini-COBRA benefits were not available. The type of Qualifying Event will determine: (1) who is eligible for Mini-COBRA and (2) the length of time that the benefits must be offered. See the chart below for a summary.²

Qualifying Event	QUALIFIED BENEFICIARY	LENGTH OF TIME COVERAGE MUST BE OFFERED
death of employee	spouse dependent child	36 months
termination of employee's employment (other than by reason of employee's gross misconduct)	employee spouse dependent child	18 months
reduction in hours worked by employee	employee spouse dependent child	18 months
divorce or legal separation of the employee from his/her spouse	spouse dependent child	36 months
employee becomes entitled to Medicare	spouse dependent child	36 months
dependent child is no longer considered to be dependent under the small group health benefit plan	dependent child	36 months

Note: There is a special rule for Qualified Beneficiaries who are determined to be disabled under the Social Security Act at the time of a Qualifying Event involving termination or reduction in work hours. Coverage may be extended from 18 months to 29 months if notice of such determination is given to the small group carrier within 60 days of the date of such determination and before the end of the 18-month period. Disabled individuals may be required to pay 150% of the premium for Mini-COBRA coverage after the initial 18-month period expires. Individuals must also notify the small group carrier within 30 days of the date of a final determination that they are no longer disabled.

2. Notice Requirements Under the Massachusetts Mini-COBRA Law

Notice to Qualified Beneficiaries of their Rights Under Mini-COBRA

The Mini-COBRA law requires small group carriers to provide the Qualified Beneficiary with certain notices of the right to continue coverage.
1. Notice of Rights at the Time Coverage Begins
  The small group carrier must provide notification to each employee and spouse of his/her rights under Mini-COBRA at the time of commencement of coverage.
2. Notice of Rights when the Small Group Carrier is Aware of a Qualifying Event
  Once the small group carrier is aware that a Qualifying Event has occurred, it must provide notice to the Qualified Beneficiary of his/her rights under Mini-COBRA. This notice must be provided within 14 days of the date the small group carrier becomes aware of the Qualifying Event.
  1. If the Qualifying Event is either: (1) the divorce or legal separation of the employee from the employee's spouse or 2) a dependent child is no longer considered to be dependent under the terms of the small group health benefit plan, the small group carrier must provide the Qualified Beneficiary with a notice of his/her rights within 14 days of the date the small group carrier obtains actual knowledge of the event. The Qualified Beneficiary or employee is responsible for notifying the small group carrier that such a Qualifying Event has occurred. The Qualified Beneficiary or employee must notify the small group carrier within 60 days of the date that the divorce/legal separation occurred or that the dependent child is no longer considered dependent under the plan.
  2. If the Qualifying Event is either: (1) the termination of employee's employment or reduction in work hours; (2) the death of the employee; or (3) the employee becomes entitled to Medicare, the small group carrier must provide the Qualified Beneficiary with a notice of his/her rights within 14 days of the date the small group carrier obtains actual knowledge of the event.
3. Small Group Carriers May Require Notices to be Issued by an Employer/ Intermediary
  According to the Mini-COBRA provisions, a small group carrier may require the small employer/intermediary to issue notices to Qualified Beneficiaries. If the small group carrier requires such notices to be issued by small employers/intermediaries, it must do the following pursuant to the Division's Bulletin 97-05:
  1. the small group carrier must notify the small employer/intermediary in writing that it is required to issue all applicable notices;
  2. the small group carrier must provide the small employer/intermediary with the name and telephone number of a contact person who is familiar with Mini-COBRA and such carrier's procedures for implementing Mini-COBRA; and
  3. the small group carrier must provide the small employer/intermediary with the form and content of the language required to be provided in any notice it is requiring the small employer/intermediary to issue.
  Note: Small group carriers may require small employers/intermediaries to issue notices to Qualified Beneficiaries under the terms of its contract with the small employer/intermediary. However, if the small group carrier requires the small employer/intermediary to issue such notices or if the contract terms indicate that a small employer/intermediary must issue such notices, the small group carrier should provide the small employer/intermediary written instructions that clearly and simply define the small group carrier's procedures regarding Mini-COBRA and the small employer's/intermediary's responsibilities with regard to the issuance of such notices.
Notification to a Small Group Carrier that a Qualifying Event Has Occurred
1. Notifying the Small Group Carrier of a Divorce or Legal Separation or that a Dependent Child is No Longer Dependent under the Terms of the Small Group Plan
  
  If the Qualifying Event is either: (1) a divorce or legal separation or (2) a dependent child is no longer considered to be dependent under the terms of the small group health benefit plan, the employee or Qualified Beneficiary is responsible for notifying the small group carrier of the event. If the Qualified Beneficiary does not know how to contact the small group carrier directly, the small employer/intermediary should be able to help a Qualified Beneficiary or employee to notify the small group carrier of a Qualifying Event since it is likely to have the name and telephone number of a contact person at the small group carrier who is familiar with its Mini-COBRA procedures.
2. Notifying the Small Group Carrier of the Termination or Reduction in Employee's Work Hours, Death of the Employee or that the Employee has Become Entitled to Medicare Benefits
  
  If the Qualifying Event is either: (1) the termination or reduction in employee's work hours; (2) the death of the employee; or (3) the employee becomes entitled to Medicare benefits, the small group carriers and small employers/intermediaries should work together to ensure that the small group carrier is fully informed of the Qualifying Event.
  
  Small group carriers may require small employers/intermediaries to provide: them with notices of these Qualifying Events under the terms of their contracts with small employers/intermediaries. If the contract terms indicate that small employers/intermediaries must notify the small group carrier of these Qualifying Events, the small group carrier should also provide the small employer/intermediary with written instructions that clearly and simply define the small group carrier's procedures regarding Mini-COBRA and the small employer's/intermediary's responsibilities with regard to notifying it of a Qualifying Event.

3. Election period

The Election Period is the period of time in which a Qualified Beneficiary may decide to continue his/her coverage under Mini-COBRA by making a written request for the coverage. Qualified Beneficiaries have 60 days in which to elect to continue coverage. The Election Period runs 60 days from the later of:

the date on which coverage terminates under the small group health benefit plan by reason of the qualifying event; or
the date the notice to elect Mini-COBRA coverage is sent.

At any time during the 60-day election period, the Qualified Beneficiary may decide to waive his/her right to continue coverage under Mini-COBRA. If the Qualified Beneficiary changes his/her mind, the waiver may be revoked before the end of the election period. If the waiver is revoked, the small group carrier is only required to provide coverage beginning on the date the waiver is revoked.

4. Payment of Premiums

The premium for Mini-COBRA coverage cannot exceed 102% of the cost of the small group health benefit plan for similarly situated individuals who have not had a qualifying event. Disabled individuals may be required to pay 150% of the premium for Mini-COBRA coverage after the initial 18-month period expires.

The first premium payment must be made within 45 days after the day Mini-COBRA is elected. The small group carrier cannot require the first premium payment before that date.

Subsequent premium payments may, at the election of the Qualified Beneficiary, be made in monthly installments. The Mini-COBRA law allows a minimum 30-day grace period for subsequent premium payments. The grace period may be longer if the terms of the small group health benefit plan allow for a longer period.

The Mini-COBRA law indicates that the small group carrier may require that payments and related communications be made indirectly through the small employer/intermediary. Pursuant to the Division's Bulletin 97-05, if the small group carrier requires the small employer/intermediary to collect premium payments from a Qualified Beneficiary, it cannot require the small employer/intermediary to pay any premium "up front" for the Qualified Beneficiary. Therefore, Qualified Beneficiaries should make every effort to pay their premium for Mini-COBRA coverage in a timely manner. This will ensure that Mini-COBRA coverage is not cancelled due to nonpayment of premiums.

5. A Small Employer's Responsibilities under Mini-COBRA

The Mini-COBRA law applies to small group carriers. Small group carriers may require small employers to help with the administration of Mini-COBRA in the provision of notices and/or in collecting premiums. If a Qualified Beneficiary has questions regarding a small employer's responsibilities with regard to notices or collection of premiums he/she may want to do the following:

Contact the small group carrier to find out whether it requires the small employer to provide notices or to collect premiums. The small group carrier should be able to explain the procedures it has in place for Qualified Beneficiaries to access the Mini-COBRA benefit.
If the small group carrier requires a small employer to provide notices and/or collect premiums and a Qualified Beneficiary has questions about his/her small employer's responsibilities, he/she should contact the Massachusetts Office of the Attorney General, Regulated Industries Division at (617) 727-2200.

6. When Mini-COBRA Coverage Ends

Mini-COBRA coverage ends in any of the following circumstances:

the maximum time period for coverage expires (e.g. 18 months, 29 months. 36 months);
when a small group health benefit plan is no longer being provided to other similarly situated eligible employees;
an individual becomes covered under any other health benefit plan which does not contain any exclusion or limitation with respect to any preexisting condition of such individual;
premiums are not paid in a timely manner; or
an individual becomes entitled to Medicare benefits.

7. Employers with 20 or More Employees

COBRA requires that continuation benefits (similar to Mini-COBRA) be provided under group health plans offered by employers with 20 or more employees. The Division of Insurance does not enforce or administer COBRA. For more information about COBRA, please contact:

The U.S. Department of Labor
John F. Kennedy Federal Building, Room 575
Boston, MA 02203
(617) 565-9600

Questions regarding Mini-COBRA can be directed to the Division's Consumer Service line at (617) 521-7777.

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