New Texas State Continuation Subsidy Bill Will Likely Help but a Few Unemployed Texans.

Under a new Texas law, if you were involuntarily terminated on or after September 1, 2008 from a small Texas business with less than 20 full-time employees, you might soon have have a special, “limited special enrollment opportunity” to elect State Continuation coverage and apply for the 65% ARRA insurance premium subsidy.

 

This will apply only to those Texans who: (1) did not elect State Continuation or who lost State Continuation coverage for some reason other than expiration of the 6-month Texas state continuation period, and (2) are still within their six-month period for potential continuation coverage.

In any case, the coverage under this special election will not extend past the date when your original 6-month period would have ended.

The bill is expected to be approved and signed into law by June by Governor Perry.  The problems that I see with this law is that, assuming it is law by June 1, it will only really help those who were terminated after December 1, 2008, and who:

• Had health insurance from their employer (less than 20 full-time employees) but did not elect State Continuation health insurance coverage within sixty days of termination date. 
• Since Texas does not require employers to notify terminated employees of their right or how to apply for State Continuation, this could be quite a few eligible individuals.
• Since the responsibility is on insurance carriers and not (less than 20 FT employees) employers to notify terminated employees, but the employers must notify the insurance companies that the employees have been terminated, it is still likely that many potentially eligible applicants will never get the word, in time, to apply for the subsidy, because…
• Since State Continuation provides only six months of eligible coverage and not the eighteen months as in COBRA-eligible employers (20 or more FT employees) this new law will likely only help recently-terminated employees of small businesses and will be of no help to those who were terminated last year.
• Even if they are made aware of this new law and the potential 65% premium subsidy, State continuation-eligible employees who were terminated earlier in 2009 may not bother to apply if they would only be eligible for one or two months of subsidized coverage, after which they would have to apply for yet another new health insurance plan. 

A better bill would require small State Continuation employers to notify all involuntarily terminated employees that they are eligible for six months of state continuation at the point of termination, and require health insurance carriers to notify eligible employees within 45 days of their termination how to apply for State Continuation, as is required under Federal COBRA legislation.

Given the total cost to Texans for Austin legislators to draft a bill, debate and negotiate it among the House and Senate and sign it into law, the number of trees killed to provide the paper pulp, and the cost to “someone” to implement and enforce a law, this legislation could go a lot farther than it did in really helping a significant number of unemployed Texans.