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Member, Beacon International Group, Ltd.
St. PAUL, Minn.—The Minnesota Department of Human Services has developed a model notice that employers can use to advise involuntarily terminated low-income employees about a new state law that will pay for beneficiaries’ share of COBRA health care premiums.
Under the law, the state will pay 35% of the COBRA premium for laid-off employees who are eligible for a federal COBRA premium subsidy. The federal subsidy pays 65% of the COBRA premium up to nine months for individuals who lose their jobs through the end of this year. With the combined subsidies, eligible beneficiaries in Minnesota will—for a limited period of time—have free COBRA coverage.
The Minnesota COBRA premium subsidy that went into effect July 1 is available to a single adult with a monthly gross income up to $2,257 and assets, excluding certain items such as retirement plan funds, that do not exceed $10,000. The monthly gross income limit for a family of three is $4,198 with an asset limit of $20,000.
Under the law, the state will pay the 35% share of the COBRA premium directly to the employer or plan administrator. The state subsidy is provided as long as the beneficiary is eligible for the federal subsidy.
The law does not cover prior COBRA premiums paid by beneficiaries prior to July 1 or during the time their subsidy applications are being reviewed by state regulators.
The model notice is available at www.dhs.state.mn.us.