SB 377-FN – AS INTRODUCED
2006 SESSION
01/09
SENATE BILL 377-FN
AN ACT relative to COBRA coverage for persons 55 years of age or older.
SPONSORS: Sen. Fuller Clark, Dist 24; Sen. Estabrook, Dist 21; Sen. Larsen, Dist 15; Sen. Hassan, Dist 23; Rep. Hofemann, Straf 6; Rep. Marshall Quandt, Rock 13; Rep. C. Hamm, Merr 4
COMMITTEE: Banks and Insurance
This bill extends COBRA coverage to persons who are 55 years of age or older who are dismissed from employment or who retire at 55 years of age or older until they are eligible for Medicare.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
06-2907
01/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
AN ACT relative to COBRA coverage for persons 55 years of age or older.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Extension of COBRA to Certain Retirees. Amend RSA 415:18, VII(g)(1)(D) to read as follows:
(D) When the surviving spouse, divorced spouse, or legally separated spouse of a covered employee is 55 years of age or older, in the case of the death of the covered employee; or, the divorce or the legal separation of the covered employee from the employee’s spouse; or in the case of a person who is 55 years of age or older and is dismissed from his or her employment, except dismissal for gross misconduct, or who retires at 55 years of age or older, then the extension period shall continue until the surviving spouse, divorced spouse, [or] legally separated spouse, or retiree becomes eligible for participation in another employer-based group plan or becomes eligible for medicare.
2 Effective Date. This act shall take effect 60 days after its passage.
LBAO
06-2907
Revised 12/23/05
SB 377 FISCAL NOTE
AN ACT relative to COBRA coverage for persons 55 years of age or older.
FISCAL IMPACT:
The Insurance Department stated this bill may increase county and local expenditures and state revenue by an indeterminable amount in FY 2006 and each year thereafter. The Department of Administrative Services stated this bill may increase state revenue and expenditures. There will be no fiscal impact on county and local revenues.
METHODOLOGY:
The Insurance Department stated this bill intends to extend continuation rights to both the employee who retires at age 55 or older and the employee’s spouse, in the event the spouse is age 55 or older at the time the employee retires. Continuation rights allow individuals to continue to participate in the group plan as long as they pay what it costs the group for such coverage. Continuation rights are subject to anti-selection. The extension of these rights will increase the cost of group insurance. This law only applies to fully insured plans. The State is self-funded. This law would have no effect on the cost of state coverage, unless the State chose to grant the same continuation rights to its plan participants. The Department assumed that the State would choose to simply comply with the federal COBRA law. To the extent county and local governments have fully insured plans, their plan costs could increase. To the extent insurance premiums increase, there could be an increase in premium tax revenue.
The Department of Administrative Services stated that because COBRA coverage is paid for by the person receiving the benefit, there is no fiscal impact due to the coverage benefit itself. However, state general fund revenue and expenditures will increase as a result of overseeing the collection of the 2 percent administrative fee applied to the working rate and paid by the COBRA subscriber. It is unknown how many individuals will take advantage of this bill. It is possible that COBRA eligible individuals who opt to pay COBRA rates do so because the benefit in paid claims exceeds the cost paid for COBRA. Accordingly, inclusion of these additional COBRA beneficiaries may negatively impact the paid claim experience of the entire state plan because they may present higher claims as a group, and ultimately drive up the working rates of the self-insured program.