The document provides an overview of recent changes to benefits laws as of June 15, 2009. It summarizes new laws regarding equal mental health and substance abuse benefits under the new health care reform law, coverage of medical leaves for students under Michelle's Law, the COBRA premium subsidy under the stimulus bill, changes to FMLA regulations, expanded FMLA leave for military families, an expanded definition of disability under the ADA, new Medicare reporting requirements, a ban on genetic discrimination, special enrollment rights under HIPAA, and changes to HIPAA privacy and security rules.

1. BENEFITS UPDATE
WEEK OF JUNE 15, 2009
The Strange Interaction Between Medicare and COBRA
For an aged or disabled beneficiary enrolled in both a group health plan and Medicare, Medicare is a
primary payer for benefits in effect under COBRA. A group health plan may even pay benefits secondary
to Medicare for an aged or disabled beneficiary who has current employment status if the plan coverage
is COBRA continuation coverage because of reduced hours of work. Medicare is the primary payer for
this beneficiary because, although he or she has current employment status, the group health plan
coverage is by virtue of the COBRA law rather than by virtue of the current employment status.
COBRA continuation coverage may be terminated when, after having elected COBRA continuation
coverage, a qualified beneficiary becomes enrolled in Medicare. Mere eligibility is disregarded. Being
enrolled in Medicare before electing COBRA is disregarded with respect to the employee.
Being enrolled in Medicare before electing COBRA can affect the length of COBRA coverage with respect
to a spouse. If the employee became entitled to Medicare before experiencing a qualifying event that is a
termination of employment, the maximum coverage period for the spouse ends on the later of -
36 months after the date the employee became entitled to Medicare; or
18 months after the date of the employee's termination of employment.
A terminated employee's entitlement to Medicare after the start of an 18-month period of COBRA
coverage does not constitute a second qualifying event for the employee's spouse (which would have
triggered a 36-month period of coverage for the spouse, as measured from the date of the employee's
termination).
For those eligible for the COBRA subsidy (65% of premium for up to 9 months), the subsidy ends with the
first month beginning on or after the date that the qualified beneficiary becomes eligible for Medicare. He
or she must notify the group health plan providing the COBRA coverage of such eligibility in writing.
New Benefits Laws – 2009
This article is intended to provide a high level summary of benefits laws recently effective or effective in
the future as of June 15, 2009.
New Law Requires Equal Benefits for Mental Health and Addiction
Employers with more than 50 employees who provide mental health or substance use disorder benefits
must impose the same limitations on these benefits as they do for medical and surgical benefits, effective
for plan years beginning after October 3, 2009 (January 1, 2010 for calendar year-end plans).
Michelle’s Law
Effective for plan years beginning on or after October 9, 2009 (January 1, 2010 for calendar year-end
plans), all group health plans must continue to cover dependent students who take a medically necessary
leave of absence causing them to lose student status for purposes of coverage under the terms of the
plan.
This Benefits Update is intended to convey general information and may not take into account all the
circumstances relevant to a particular person’s situation.
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2. ARRA’s COBRA Provisions
As part of the Stimulus Package, employees involuntarily terminated from September 1, 2008 through
December 31, 2009 and their family members will only have to pay 35% of the premium amount (rather
than the usual 102%) for up to 9 months to continue group health coverage.
Employers will take a payroll tax credit for 65% of the premium amount.
The employer must offer the same health coverage the individual had at the time of the qualifying event in
accordance with COBRA, but may also offer other less expensive health coverage options.
If the premium assistance is provided to “high income individuals,” then their income tax will be increased
by the amount of the subsidy.
Individuals who did not elect COBRA when eligible or let coverage lapse have a second chance to elect
coverage. Coverage is effective back to the first period of coverage after February 17, 2009 (generally,
March 1, 2009).
Updated COBRA election notices should have been provided by April 18, 2009. The DOL issued model
notices. Individuals have 60 days after notice is provided to elect the subsidy and coverage.
New Final FMLA Regulations
Significantly, the DOL has determined that, effective January 16, 2009:
• employers can contact the employee’s health care provider directly for the purposes of
authenticating and clarifying the medical certification;
• absent emergency situations, an employee must comply with the employer’s usual procedures for
requesting leave; and
• employers may retroactively designate leave as FMLA leave absent a showing of individual harm.
New forms are available on the DOL website.
FMLA Amended to Cover Leave Associated with Military Service
Amendments provide unpaid leave to employees under 2 new circumstances:
• to care for a family member injured through service in the armed forces (effective January 28,
2008) for up to 26 weeks; or
• to deal with an urgent situation that occurs when a family member is on or called away to active
military duty (effective November 17, 2008) for up to 12 weeks.
ADA Amended
The ADA defines "disability" as an impairment that substantially limits one or more major life activities, a
record of such an impairment, or being regarded as having such an impairment.
Effective January 1, 2009, the definition of "disability" is to be interpreted broadly; the definition of "major
life activities" is expanded; mitigating measures other than "ordinary eyeglasses or contact lenses" are
not considered in assessing whether an individual has a disability; an impairment that is episodic or in
remission is a disability if it would substantially limit a major life activity when active; and an individual
subjected to an action prohibited by the ADA (e.g., failure to hire) because of an actual or perceived
This Benefits Update is intended to convey general information and may not take into account all the
circumstances relevant to a particular person’s situation.
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3. impairment will meet the "regarded as" definition of disability, unless the impairment is transitory and
minor.
New Medicare As Secondary Payer Reporting Requirement
Effective January 1, 2009, there is a new reporting requirement requiring carriers and third party
administrators of group health plans to gather information from plan sponsors and plan participants to
identify situations in which the group health plans are or have been primary to Medicare and to submit the
information to the Department of Health and Human Services. For plans that are self-insured and self-
administered, a plan administrator or fiduciary must gather and submit the required information.
New Nondiscrimination Law Prohibiting Genetic Discrimination
There are new prohibitions against adjusting premium/contribution amounts and discrimination against an
employee with respect to compensation, terms, conditions, or privileges of employment on the basis of
genetic information, requesting genetic information, and requesting an individual undergo a genetic test.
Group health insurance provisions apply to plan years that begin after May 21, 2009 (January 1, 2010 for
calendar year-end plans). Employment practice provisions are effective November 21, 2009.
New HIPAA Special Enrollment Rights for Employees
New law allows States to subsidize premiums for employer-provided health coverage; requires special
enrollment for employees, spouses, and dependents as a result of loss of eligibility under Medicaid or
SCHIP and upon becoming eligible for a premium assistance subsidy under Medicaid or SCHIP; requires
that employers give notice to employees; and requires that employers make disclosures to the State,
effective April 1, 2009.
New HIPAA Privacy and Security Rule Changes
Key changes include direct application of the HIPAA Privacy and Security Rules to business associates,
required notification to participants in the event of a breach of protected health information (“PHI”) 1 ,
increased participant rights, increased restrictions with respect to use of PHI, and increased enforcement
and penalties for noncompliance.
There are various effective dates, but most of the new provisions will take effect on February 17, 2010.
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HHS has issued a proposed safe harbor describing the technologies and methodologies that can be
used to render PHI unusable, unreadable, or indecipherable to unauthorized individuals to determine
whether unsecured PHI has been breached.
This Benefits Update is intended to convey general information and may not take into account all the
circumstances relevant to a particular person’s situation.
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