On April 10, 2018, Arizona Governor Doug Ducey signed S.B. 1217 into law, creating a COBRA-like state continuation law (Arizona Mini-COBRA also known as Arizona COBRA).
Effective initially as of January 2019, Arizona Mini-COBRA applies to companies who are not otherwise subject to federal COBRA requirements, those companies providing employee benefits/health insurance that have less than 20 employees.
Prior to the revision effective July 29, 2019, companies with 20 or less (1-20) employees were required to comply. Now, if you are an Arizona employer with less than 20 employees (1-19), you will want to educate yourself on how you can stay in compliance for any employees or their dependents that experience a COBRA qualifying event.
For more information, continue reading or download our Arizona Mini-COBRA Policy Sample to start complying with this legislation today.
NOTE: Employers are not required to provide employees with health insurance benefits unless they have over 50 employees, which is referred to as the "Employer Mandate" requirement of the Affordable Care Act (ACA). However, if a company in Arizona does provide health insurance then, regardless of the number of employees they have, that company is required to comply with either federal COBRA or Arizona COBRA laws.
Employees and their dependents are eligible for COBRA in Arizona if they are covered under an employer’s health benefits plan for at least three months (90 days) and experience a qualifying event.
An employee can experience a COBRA qualifying event in Arizona when one of the following types of life change events occur:
NOTE: Employers are responsible for notifying employees and their dependents of their right to continue group coverage if they lose coverage due to one or more of the aforementioned qualifying events. This notification at the time of a qualifying event is known as an Election Notice.
Generally, Initial Notices at the start of the plan year should be distributed to all employees to educate them on their rights if they experience a life change event in the future.
Need some guidance? See our sample policy below:
COBRA compliance in Arizona can be difficult, but it doesn’t have to be. That is why we created this Arizona Mini-COBRA Policy Sample, which you can download here.
Employees and their dependents that are covered in the employers' health plan are eligible for Arizona Mini-COBRA coverage, except if or when the individual:
For Arizona Mini-COBRA, the coverage can last up to 18 months, however, certain factors can make that period last longer or shorter:
Maximum charges can go up to 105% of the initial cost of the plan premium. However, a plan can charge qualified beneficiaries eligible for the disability extension 150% of the cost of the initial plan during the final 11 months of COBRA coverage. Of course, you should factor these into your tracked labor costs.
NOTE: The employer is not required to bear any premium cost or administrative fees unless desired. Payment, instead, is required by the qualified beneficiary / employee. Premiums are charged by the carrier and collected by either the employer or COBRA administrator (usually along with the administrative fee).
Along with Mini-COBRA, dealing with employee benefits in Arizona can be a hassle. Thankfully, a great Benefits Administration Solution can be worth its weight in gold. Just avoiding over-payments of premiums to Arizona's Insurance Carriers, which on average can be around $750 per employee per month can provide enough ROI to pay for the solution. Additionally, you can streamline COBRA workflows with automated carrier communications and feeds.
If you have any other questions or concerns about benefits and compliance, schedule a compliance check with the Inflection HR compliance experts.
We offer multiple levels of HR Compliance Support in Arizona and beyond, from ACA Compliance and Arizona minimum wage compliance to Arizona Sick Leave solutions. Being headquartered in Gilbert, AZ, we know what it takes to navigate state and federal laws by implementing policies and best practices.
Feel free to email us with any questions you have or call us at 877-449-0676, we’re happy to help! What's next? Learn more about the shifting landscape of HR in the 21st Century.