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.
Under Mississippi's continuation of coverage law, which applies to fully insured employers with fewer than 20 employees, employees and eligible dependents who would otherwise lose group health insurance coverage due to certain qualifying events have the right to continue coverage for up to 12 months. To be eligible, the employee or eligible dependent must have been continuously insured under the group policy (or for similar benefits under another group policy it replaced) for 3 consecutive months immediately prior to the date of termination of coverage.
Continuation coverage must be provided for employees and eligible dependents (spouses and children) for up to 12 months when health insurance under the group policy would otherwise terminate due to the following events:
Employers are not required to offer continuation coverage to any person:
Continuation of benefits may be terminated before the end of 12 months for the following reasons:
The premium contribution paid for continuation of coverage may not exceed the full group rate. The contribution must be paid in advance, but employees or eligible dependents may not be required to pay the amount of the contribution less often than monthly.
Notice by Employer/Insurer: Notification of the right to continue coverage must be included in each certificate of coverage, and must also be provided to the individual(s) eligible to elect continuation within 14 days of an employee's death or within 14 days after an employee provides notice of divorce or of his or her child ceasing to be an eligible dependent. Notice by Employees/Eligible Dependents: In order to be eligible for continuation of coverage, the employee or eligible dependent must elect continuation in writing (on a form furnished by the insurer) and pay the first contribution, in advance, on or before the date on which coverage would otherwise terminate. In the event of the employee's death or divorce, or a child ceasing to be an eligible dependent, the spouse or child has 30 days after the notice of the right to continue coverage to elect continuation.
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.
HR 360 and the HR 360 logo are trademarks or service marks and are the property of their respective owners and should be treated as such. Program terms and conditions, pricing, features and service options are subject to change without notice.
HR 360, Inc., 400 Main Street, 4th Floor, Stamford, CT 06901 | 800-552-8211