

		BCBSNC Clarifies Subsidy Administration for Small Employers Offering State Continuation Coverage Blue Cross Blue Shield of NC recently outlined new procedures that will help small employers with administration of the COBRA/State Continuation subsidy initiated as part of the American Recovery and Reinvestment Act of 2009. The following is a brief summary of BCBSNC’s subsidy administration process for small employers who offer State Continuation coverage. Subsidy Election Notice By April 18, 2009, BCBSNC will send notices to all qualified beneficiaries (not just covered employees) who experience a qualifying event any time between September 1, 2008, and December 31, 2009, and who have either elected State Continuation coverage (and may be eligible for the subsidy) or are eligible to elect State Continuation coverage. Employers should note that the NC General Assembly is currently considering legislation that would provide a special election period for State Continuation coverage. If this legislation is adopted, BCBSNC will send the required notice to all eligible individuals as required by law. Employee Election of the Subsidy A qualified beneficiary can request the subsidy by completing the “Request for Treatment as an Assistance Eligible Individual” form that is included in the notice supplied by BCBSNC. Upon receipt of the completed form, BCBSNC will contact the employer to confirm that the employee was involuntarily terminated. The employer must then confirm the involuntary termination in writing before the subsidy request can be processed. Payment of Premiums If the qualified beneficiary is eligible for the subsidy, BCBSNC will invoice the individual for the 35% of the total premium owed. BCBSNC will then pay the remaining 65% and request reimbursement from the federal government through payroll taxes. BCBSNC will state the total amount of premium owed for each month of coverage in the notice they supply. If the qualified beneficiary enrolls in State Continuation coverage, but does not apply or is not eligible for the subsidy, the employer maintains responsibility for billing the individual, collecting payments, and remitting the full amount to BCBSNC as part of their group premium payment. Further Information On April 17, BCBSNC will activate a toll-free phone number dedicated to calls related to the COBRA/State Continuation premium subsidy, and that number will be posted on the employer section of www.bcbsnc.com. Should you have any additional questions, please contact our office at 919-403-1986. Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.
April 13, 2009 Hill, Chesson & Woody Employee Benefit Services 194 Finley Golf Course Road, Suite 200, Chapel Hill, NC 27517 Phone: 919.403.1986 Fax: 919.869-2063 www.hcwbenefits.com