|TO:||Commercial Health Insurers, Blue Cross and Blue Shield of Massachusetts (BCBSMA), Health Maintenance Organizations|
|FROM:||Linda Ruthardt, Commissioner of Insurance|
|DATE:||May 11, 1998|
|RE:||Eligibility for Nongroup Guaranteed Issue Health Plans when a person is not or is no longer eligible for COBRA or small group continuation of coverage benefits|
|This Bulletin addresses the issue of whether an individual must elect and exhaust the maximum period of coverage allowed by COBRA or the small group continuation of coverage law in order to meet one of the eligibility criteria under the Massachusetts Nongroup Health Insurance Law, G.L. c. 176M (Chapter 176M). Chapter 176M, § 1 requires individuals who wish to enroll in Nongroup Guaranteed Issue Health Plans to meet certain eligibility requirements enumerated in the definition of "Eligible individual." 1 The definition of an "Eligible individual" includes as a criterion an individual who "is not or is no longer eligible for" continuation benefits under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) or the small group continuation of coverage law found at G.L. c. 176J, § 9. For the purposes of this Bulletin, the aforementioned criterion will be referred to as the "continuation of coverage criterion". The Division of Insurance (Division) has reviewed whether an individual is not or is no longer eligible" for COBRA or small group continuation of coverage benefits (and, therefore, eligible for a Nongroup Guaranteed Issue Health Plan under the continuation of coverage criterion) if: (1) an individual does not elect COBRA or small group continuation of coverage benefits offered to such individual or (2) an individual has elected COBRA or small group continuation of coverage benefits but does not exhaust the benefit.|
|Chapter 176M does not require an individual to elect and exhaust the maximum period of coverage allowed by COBRA or the small group continuation of coverage law in order to meet the continuation of coverage criterion for eligibility in a Nongroup Guaranteed Issue Health Plan. Instead, Chapter 176M focuses on the lack or loss of eligibility for COBRA or small group continuation of coverage benefits. Below are some examples of situations which would render an individual "not or no longer eligible" for small group continuation of coverage benefits and therefore, eligible under the continuation of coverage criterion to enroll in a Nongroup Guaranteed Issue Health Plan. The Division does not enforce or administer COBRA. 2 Therefore, it cannot opine on whether a particular individual "is not or no longer eligible" for COBRA benefits under federal law. However, please note that although differences in language between state and federal law may affect the analysis, the following examples appear to generally apply to COBRA benefits as well.|
1 The definition of " Eligible individual" being implemented under the Massachusetts individual market alternative mechanism pursuant to the health insurance portability and accountability act of 1996 (HIPAA) may be found in the Massachusetts submission to the Health Care Financing Administration for its alternative mechanism dated March 31, 1997. This document may be obtained from the Health Unit in the State Rating Bureau at the Division Of Insurance at a cost of$ 25.00. Carriers should comply with this implementation in order to avoid administrative sanctions and penalties, including but not limited to those contained in G.L. c. 176D.
2 Cobra benefits generally apply to employer groups with twenty or more employees.