They may be out of a job, but that doesn’t mean workers have necessarily lost their health coverage—that is, in the states that have ordered insurers to allow companies to keep those workers on their insured rolls.
According to the Society for Human Resource Management, which also says that such mandates from state insurance commissioners to insurers are helping employers keep coverage for workers, despite the fact that they no longer meet a plan’s eligibility criteria.
They directives allow–but don’t require–employers to continue to carry newly ineligible workers on their plans. “That said, for a fully insured plan, a state insurance commission could arguably require such a coverage bridge,” Benjamin J Conley, a partner at law firm Seyfarth Shaw in Chicago, told SHRM.
In March and April, the following states issued such directives: California, Colorado, Maine, Ohio and Wisconsin. (Check out SHRM’s site for more information on the directives). Orders ranged from permitting grace periods despite nonpayment; waiving late-payment fees; not being allowed to deny coverage to an employee if an employer wants to allow continued coverage; not being allowed to deny coverage to an employee whose hours have been cut below those required for coverage; and even continuing coverage for dental, vision and prescription drug plans that are separate policies.
Those pronouncements only apply to fully insured plans,since the Employee Retirement Income Security Act generally keeps states from mandating actions for employers that sponsor self-funded plans. “We’ve seen a few states strongly recommend that employers sponsoring self-insured plans provide bridge coverage, but even those directives seem to recognize that the state insurance commissioners have no authority to expressly order this,” Conley said.
There may or may not be an effect on COBRA coverage, Conley added, noting that COBRA coverage “is only triggered if there is a reduction in hours or termination of employment that causes a loss of coverage.”
In addition, some states have also ordered insurers to continue providing coverage to fully insured employer plans even if the employer has failed to pay its monthly premiums.
And at time when many businesses are hurting and unable to afford health care coverage for employees, some 900 furloughed health care workers at MUSC Health in South Carolina have some relief, as well. Thanks to two donors, health insurance premiums for employees will be paid through June 30.
“Thanks to these gifts, our care team members can find some comfort in knowing that their health care is one less thing they have to worry about right now,” MUSC Health CEO Patrick J. Cawley told Count on 2 News.