local governments exempt from COBRA???

pryan

I just received my HR Executive Special Report on COBRA and noticed on page 10 it states that local governments are exempt from COBRA but generally must comply with parallel requirements under the federal Public Health Service Act. I had never heard this before and was always under the impression that we, as a local government (municipality), must also comply with COBRA requirements.

I could find no information on the federal Public Health Service Act to learn more. Can you explain further or direct me to an additional source to learn more about this possible exemption? Thank you.

Tony Kessler

pryan, here is a reply from Julie Athey, the author of "How to Comply with COBRA Without Getting Bit." tk
-------------

It's pretty confusing, actually. The problem lies in how you define the term "COBRA." The general COBRA provisions appear in the Internal Revenue Code. This is what most people are referring to when they say "COBRA." In fact, the regulations issued by the IRS say that the group health plan continuation coverage requirements that apply to local governments lie outside of COBRA. Here is the relevant regulation:

26 C.F.R. section 4980B-2, Q&A-4: What group health plans are subject to COBRA?

A-4: (a) All group health plans are subject to COBRA except group health plans described in paragraph (b) of this Q&A-4. Group health plans described in paragraph (b) of this Q&A-4 are referred to in Sec. Sec. 54.4980B-1 through 54.4980B-10 as excepted from COBRA.

(b) The following group health plans are excepted from COBRA--

(1) Small-employer plans (see Q&A-5 of this section);
(2) Church plans (within the meaning of section 414(e)); and
(3) Governmental plans (within the meaning of section 414(d)).

(c) The COBRA continuation coverage requirements generally do not apply to group health plans that are excepted from COBRA. However, a small-employer plan otherwise excepted from COBRA is nonetheless subject to COBRA with respect to qualified beneficiaries who experience a qualifying event during a period when the plan is not a small-employer plan (see paragraph (g) of Q&A-5 of this section).

(d) Although governmental plans are not subject to the COBRA continuation coverage requirements, group health plans maintained by state or local governments are generally subject to parallel continuation coverage requirements that were added by section 10003 of COBRA to the Public Health Service Act (42 U.S.C. 300bb-1 through 300bb-8), which is administered by the U.S. Department of Health and Human Services. Federal employees and their family members covered under the Federal Employees Health Benefit Program are covered by generally similar, but not parallel, temporary continuation of coverage provisions enacted by the Federal Employees Health Benefits Amendments Act of 1988. See 5 U.S.C. 8905a.

But when you go to the HHS website, it appears to say that the continuation coverage requirements that apply to local governments ARE COBRA requirements, even though they appear in a different federal statute, the Public Health Service Act. See [url]http://www.cms.hhs.gov/hipaa/hipaa1/cobra/default.asp[/url] and
[url]http://www.cms.hhs.gov/hipaa/hipaa1/cobra/laws.asp[/url].

You can access the relevant laws from these pages.

I haven't gone through and compared the COBRA provisions that appear in the Internal Revenue Code to those that appear in the Public Health Service Act, but it appears that they are quite similar. I hope these resources help.

Julie Athey