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    Posted May 24, 2010

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COBRA Payments Delayed
Participants Must Pay in Full

Important Notice to NY State AEA Members:

Effective June 2010, New York State COBRA premiums that are expected to be covered by the State subsidy program will need to be paid in full by Equity Health Plan participants no later than the end of each month (e.g., June 30 for June premiums). As soon as the Fund receives payment of the June premium subsidy from New York State, it will credit that payment to the participant's account as he or she prefers, either as a payment, or a credit to future payments. In subsequent months, we will continue to collect the premiums that would have been covered by the New York subsidy up front, giving credit for those payments as soon as we receive them.

Since 2005, the New York State (NYS) COBRA Continuation Program has been a valuable source of funding that has provided critical assistance to many Equity participants, enabling them to remain insured throughout much of their COBRA eligibility periods. Those who have been fortunate enough to have qualified under both the American Recovery and Reinvestment Act of 2009 (ARRA) Subsidy and the NYS Programs have had their full premiums covered (ARRA pays 65% and NYS pays 35%). However, in recent weeks, the State Insurance Department notified the Equity-League Health Fund that due to the substantial operating deficit within the State's Budget Division (approximately $9.2 billion), the NYS Legislature has yet to enact an approved Fiscal Year 2010-11 budget (the original deadline was April 1, 2010). Due to this delay, the State of New York does not have funding established to pay its obligations, including the COBRA subsidy, from April 1, 2010 forward. Our understanding is that the Governor's Office is releasing 2010-11 "emergency appropriations" on a very limited basis. To date, the Insurance Department has been unsuccessful in securing funds for the NYS Continuation Assistance Program as an emergency appropriation (in order to pay subsidy payments for April 2010, and thereafter). At this time, Equity-League has been informed that until the Department receives emergency funding relief, subsidy payments related to our COBRA premiums from April 2010 forward will be delayed.

This means the subsidies presently due the Equity-League Health Fund have not been received and there is no way to know when, or perhaps even if, they will be received in full. Due to the uncertainty of the State's current financial situation, the Equity-League Health Fund Trustees recently conferred to determine the future policies of the Fund with regard to the NY subsidy program. In view of the substantial monies already due from the program, and to protect the Fund from putting further funds at risk (which could affect all Plan participants), the Trustees have determined that the Fund can no longer provide coverage and then wait for NY State to pay the COBRA subsidy.

We deeply regret the difficulties this change in policy will impose on many participants, and if you do not have the resources to pay for the additional premium, we urge you to contact The Actors' Fund for assistance, www.actorsfund.org. You can contact the Fund Office for an accounting of what will be due for the month of June 2010 in the event you are not certain of the amount you will be responsible to pay.

If you have any questions, please feel free to contact the Fund Office at (212) 869-9380 or outside NYC toll free at (800) 344-5220 and a Health customer service representative will assist you.

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