State-Specific Module Announced for TravisCobra

December 4, 2002, The California Assembly recently passed a new group health continuation law (A.B. 1401) requiring coverage for COBRA qualified beneficiaries covered by insured health plans or HMOs sitused in California to be extended to a total of 36 months of continuation once their 18 or 29 months of COBRA coverage is exhausted. The intent of the new law appears to be to provide an additional period of state-mandated continuation after the initial 18- or 29-month period of COBRA has expired, just as those not covered by COBRA have had under Cal-Cobra for several years. The new law applies only to COBRA qualifying events occurring after January 1, 2003.

We want to tell you what Travis is doing about this new state law and other state continuation laws.

As you know, our system is primarily designed to be a COBRA (and HIPAA) system, helping users administer to the requirements of those Federal laws. We have always tried to provide enough flexibility in TravisCobra for it to handle state continuation laws, albeit asking the system operator to (1) understand the particular state law(s) he/she is administering and (2) do some functions manually, such as setting a specific continuation expiration date and adjusting the allowable premium when COBRA coverage ends and state coverage begins (as with the 110% allowable during the extension period provided by Cal-Cobra).

Late last year we began to be interested in expanding the scope of TravisCobra to include a "state specific" capability. You may remember receiving a "Travis Update" email late this past Summer announcing that a "State Specific Module" was going to be offered either coincident with the release of Version 7.0 of TravisCobra or right after it. The intent of the State-Specific Module is to have state laws programmed in the system, just as the Federal laws are now.

In fact, the State Specific Module covers two types of state laws. Thirty-eight states have state laws similar to Cobra which apply only to continuees who (1) work for companies with fewer than 20 employees and are not subject to COBRA and, (2) are covered by an insurance policy "sitused" in that particular state. All but ten of these 38 state laws are not as extensive as COBRA - most of them require that the continuee be covered for several months before he/she loses coverage, and most offer only 3, or 6, or in some cases 12 months of coverage. So the State Specific Module for those states appeals only to administrators who do continuation services for small companies.

There are ten states whose state laws go FURTHER than the Federal COBRA law, usually offering longer periods of continuation at higher allowable premiums. Texas, for example, has a state law that says if you work for a company with fewer than 20 employees you must be offered 6 months of continuation. But if you work for a company with 20 or more employees, then the six months of state continuation must be offered once the 18 months of Cobra is exhausted (on insured, rather than self-funded, plans subject to the laws of Texas).

The new California AB 1401 requirements seem to be similar to the Texas law, but offer the possibility of as much as 18 months of coverage after COBRA coverage has expired.

The list of states whose laws go further than COBRA are: California, Georgia, Illinois, Louisiana, Minnesota, Missouri, New Hampshire, Oregon, Rhode Island, Texas

For these ten states we are going to offer an expanded state-by-state continuation module. Users will be able to license only the states they need. For example, if you license the State Specific Module for California and tell TravisCobra that an Employer is subject to COBRA (a new field in the Employer record) then new fields have been added to the benefit plan records asking (a) if the plan is insured or self-funded, and (b) if insured or an HMO, what state law governs the policy. If you indicate that an employer is subject to COBRA and a medical plan is insured under California law, the State-Specific module will print a reworded, specific-to-California letter to new PQBs disclosing that the PQB is eligible for an 18- or 7-month extension of coverage if they exhaust their 18 or 29 months of COBRA coverage. Also, the system will automatically print the application letter required to be sent to the insurance company at the end of COBRA coverage and will automatically adjust the premium after the Cobra period is finished, to whatever premium rate you want as long as it's no more than the 10% add-on allowed under California law.

On the other hand, if you have the state module for California and you say the employer is not subject to COBRA, then only 18 months of coverage will be offered (unless the QB is over 60 and has been employed by his/her employer more than five years, in which case he/she may be able to stay in the plan until eligible for Medicare) under the current Cal-Cobra law.

We will let our users know as soon as the State Specific Module is ready for California, the nine other states that offer longer-than-Cobra coverage and the 28 states mandating other state continuation. We haven't set the pricing for the State Specific module yet, but our thinking at this time is that you'll be able to license each of the ten "further than COBRA" states for a few hundred dollars, with additional state-specific "states" licensed for less.

Support fees will not change - as long as users continue to subscribe to the Support and Update Plan for TravisCobra, we'll support and update the State-Specific Module as part of the overall system.

If users have several clients who have to meet states laws, you might need to license more than one state. For example, Oregon is one of the ten states mandating coverage longer than Cobra. That state has an interesting law - if the qualifying event is Death of Employee or Divorce, the spouse can continue medical plans only until eligible for Medicare. But if the spouse is over 55 when the death or divorce occurs, then medical, dental and vision plans can be continued until Medicare eligibility. So for Oregon we're not only printing new letters but also having to key on qualifying event types, birthdays and types of plans to determine if differently-worded letters should be used, and then automatically printing them if they need to be used, offering coverage to the appropriate dates, etc.

If you have questions about the State-Specific Module, please give Travis a call at (800) 521-5409. We plan to make it available in March, 2003, shortly after the initial shipment of Release 7.0 of TravisCobra\CS, and will keep you informed about its availability.

Contact Info:
Travis Software
Garth Williams
Vice President
(281) 496-3737