Governor Paterson recently signed legislation that makes two significant changes to insured health benefits in New York . While these changes apply to the insurance companies offering policies in New York , many employers sponsoring health benefit programs may wish to review their employee communication materials and health benefits offerings , as discussed in more detail below.

The first change requires insurers offering group policies to extend the COBRA continuation period to 36 rather than 18 months. Significantly , this change applies to all group insurance policies even if the insured individual is in a health benefits program subject to the federal COBRA rules. Typically , the federal COBRA standard applies to any employer with more than 20 employees; employees of smaller employers may be provided continuation coverage under a state's “mini-COBRA” rules. In effect , this new law supplements the federal COBRA rules by providing that an individual may continue coverage after he or she has exhausted the federal 18 month period.

This change is effective as of July 1 , 2009 , and applies to all contracts issued , renewed , modified , altered or amended on or after that date.

The second change provides that insurers (in contrast to the employer sponsoring the health benefit program) must offer the children of participating employees the right to continue coverage under the insurance policy through age 29 , regardless of student and financial status. The existing law did not require insurers to extend such coverage , although many health benefits programs permit children to continue to be covered under the policy through their mid-20's if they are a full-time student and financially dependent on their parents. Under New York 's new law , the only requirements are that the children:

• must not be eligible for other employer sponsored health benefits or Medicare;
• must be unmarried; and
• must be under age 30.

The election to receive this coverage must be made: (1) within 60 days following the date the child's coverage would otherwise terminate due to age , under the terms of the policy covering the employee; (2) within 60 days after meeting the definition of "dependent child" , if coverage previously terminated; or (3) during an annual 30-day open enrollment period. Dependent children whose coverage terminated prior to the effective date of the new law will have a period of 12 months after the effective date to elect coverage under the new law.

The new law will take effect on September 1, 2009 , and applies to all policies and contracts issued, renewed, modified, altered or amended on or after that date.

As noted above the New York changes apply to insurance companies and not the employers sponsoring the health benefits program. Nonetheless , New York employers may wish to familiarize themselves with these new rules and strongly consider reviewing their employee communication materials. For example , New York employers may wish to coordinate with their insurance providers and revise their summary plan descriptions and COBRA notices to reduce employee confusion regarding their rights and obligations under the federal COBRA rules and the New York changes. Finally , employers with self-insured plans may wish to consider how these New York changes influence their existing programs.

If you have any questions regarding New York 's revised law , or would like assistance in reviewing your employee communication materials or program design , please contact Liza Hecht at lhecht@nfclegal.com or the NFC attorney with whom you normally work.