The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) generally requires group health plans sponsored by employers with 20 or more employees in the prior year to offer employees and their families the option to continue benefits for limited periods of time when coverage under the plan would otherwise end due to certain qualifying events. These events include voluntary or involuntary job loss, reduction in hours worked, death, divorce, and other life events.
COBRA sets rules for how and when continuation coverage must be offered, how employees and their families may elect COBRA, and what circumstances justify terminating coverage. The length of time for which continuation coverage must be made available depends on the type of qualifying event. For termination of employment or a reduction in hours, the maximum period of COBRA is generally 18 months. Up to 36 months of coverage may be available due to other qualifying events, or if a second qualifying event occurs during the initial period of COBRA coverage.
Please review our COBRA Steps to Success to understand the key areas involved in implementing COBRA for your company. Most states also have laws (commonly referred to as "mini-COBRA" laws) which require that group health plans provide COBRA-like continuation of benefits for certain employees and their families.
Georgia law requires insured employers, including those with fewer than 20 employees, to provide continuation of group health benefits when coverage would otherwise terminate for employees who have been continuously covered under the group plan for at least 6 months prior to termination (and their eligible dependents). Coverage must continue for the fractional policy month remaining, if any, at termination plus 3 additional policy months. For employers with 20 or more employees, eligible employees and dependents may be entitled to an additional period of continuation coverage if the employee was 60 years of age or older when the initial period of federal or state continuation coverage began.
An employee whose coverage has been terminated and who has been continuously covered under the group plan for at least six months immediately prior to such termination is entitled to have his or her coverage and the coverage of his or her eligible dependents continued under the plan.
Employers are not required to provide continuation of coverage where:
For employers with 20 or more employees, an employee who has been continuously covered under the group plan for at least six months and whose insurance under the plan would otherwise terminate at the end of the initial period of continuation of coverage for which the individual is eligible (either under federal COBRA or Georgia state continuation law), is entitled to continue coverage for himself or herself and his or her eligible dependents if the group member was 60 years of age or older as of the date on which the initial period of continuation of coverage begins.
Additionally, group health plans of employers subject to federal COBRA must contain a provision that:
General Continuation Coverage. Individuals electing general continuation coverage must be charged the same rate that applies to active group members, on a monthly basis in advance as the premiums become due during the continuation coverage period. The premium payments must include any portion of the premium paid by a former employer or other person if the employer or other person no longer contributes premium payments for this coverage.
Extended Continuation Coverage. If an eligible employee or the divorced or surviving spouse elects extended continuation coverage, the monthly premium may not exceed 120% of the total amount that would be charged for active group members. The first premium for extended continuation of coverage must be paid on the first regular due date following the expiration of benefits under federal COBRA or Georgia state continuation law.
Employers with 20 or more employees required to offer an extended period of continuation coverage (as described above) may terminate coverage upon:
Under the federal Patient Protection and Affordable Care Act (Health Care Reform), beginning with plan years starting on or after September 23, 2010, group health plans that offer dependent coverage must make the coverage available until a child reaches the age of 26. There is a temporary exception for grandfathered group health plans, which may exclude adult children who are eligible to enroll in an employer-sponsored health plan other than the group health plan of the parent. This exception will no longer be available for plan years beginning on or after January 1, 2014.
Individual states may have requirements that are more favorable to plan participants. For information about your state, please click here and contact your state insurance department for guidance.
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