Continuation of Benefits (COBRA) in Missouri (MO)

Federal COBRA

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.

Missouri Continuation of Coverage

Missouri provides employees of employers with fewer than 20 employees and their eligible spouses and dependents the right to elect continuation coverage for up to 18 months when coverage under the employer's group health plan would otherwise be lost due to certain specified events. For employers with 20 or more employees subject to federal COBRA, former and surviving spouses of a covered employee may be eligible for an extended period of continuation coverage under state law (including coverage for any dependent children) following the expiration of federal COBRA.

In addition, the initial 18-month coverage period may be extended up to 36 months if other qualifying events occur during the initial 18-month coverage period, such as the disability of the employee or a second qualifying event occurring during the initial period of continuation coverage.

Employers with Fewer Than 20 Employees Not Subject to Federal COBRA

Qualifying Events

Continuation coverage must be provided for covered employees, spouses, and dependent children for up to 18 months when coverage would otherwise be lost due to the following qualifying events:

• Employee's voluntary or involuntary termination of employment for any reason except gross misconduct
• Death of the employee
• Divorce or legal separation of the employee from his or her spouse
• Employee becomes eligible for Medicare
• Loss of child coverage due to age (child entitled to continuation)

Notice Requirements

Missouri generally follows the federal COBRA requirements with respect to notice and premium payments.

• Under federal COBRA, plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator (employer) receives notice that a qualifying event has occurred.
• Qualified beneficiaries who become entitled to elect continuation coverage must be given an election period of at least 60 days (starting on the later of the date the individual is furnished the election notice or the date coverage would be lost) to choose whether or not to elect continuation coverage.
• The person has 45 days after electing coverage to pay the initial premium.

Premium Payments
Under federal COBRA, employers may generally require a qualified beneficiary electing continuation coverage to pay up to 102% of the premium at the group rate. 

How Coverage May Be Terminated

Continuation of benefits may be terminated before the end of 18 months for the following reasons:

• Failure to make timely payment of a required premium
• The employer terminates the group policy without replacement
• The employee, spouse or dependent becomes covered under another group health plan that does not contain any exclusion or limitation of any pre-existing condition
• After electing continuation coverage, the employee, spouse or dependent becomes qualified for coverage under Medicare
• The individual who qualified for continuation coverage due to disability is no longer classified as disabled
• A covered employee, spouse or dependent files a fraudulent claim

Employers with 20 or More Employees Subject to Federal COBRA

Qualifying Events for Extended Continuation Coverage

A surviving spouse may continue coverage under an employer's group policy (including coverage for any dependent children) if such coverage would otherwise terminate due to the death of the covered employee and the surviving spouse is 55 years of age or older at the time that federal COBRA coverage expires.

Similarly, a divorced or legally separated spouse may continue coverage under an employer's group policy (including coverage for any dependent children) if such coverage would otherwise terminate because of the dissolution of marriage or legal separation and the divorced or legally separated spouse is 55 years of age or older at the time that federal COBRA coverage expires.

Notice Requirements

• In the event of the death of a covered employee, the employer is required to notify the plan administrator within 30 days of the death or prior to the expiration of the 36-month period of federal COBRA and must include the mailing address of the surviving spouse.
• A legally separated or divorced spouse must notify the plan administrator within 60 days of the separation or entry of the decree of marriage dissolution or prior to the expiration of the 36-month period of federal COBRA. The notice must include the mailing address of the legally separated or divorced spouse. 
• Notice of the right to extended continuation coverage must be provided to the legally separated, divorced or surviving spouse within 14 days of receipt of notice of the separation, dissolution of marriage or death of the covered employee. This notice must include:
  • A form for election to continue the coverage;
  • A statement of the amount of periodic premiums to be charged for the continuation of coverage and of the method and place of payment; and
  • Instructions for returning the election form by mail within 60 days after the date of mailing of the notice.

Premium Payments

• The monthly premium rate for a legally separated, divorced or surviving spouse may not exceed 102% of the group rate during the period of time covered by federal COBRA, and may not exceed 125% thereafter.
• The first premium must be paid by the legally separated, divorced or surviving spouse within 45 days of the date of the election.

Termination of Right to Extended Continuation Coverage

The right to extended continuation of coverage for legally separated, divorced or surviving spouses terminates on the earliest of any of the following:

• The failure to pay premiums when due, including any grace period allowed by the policy
• The date the group policy is terminated as to all group members (except that if a different group policy is made available to group members, the legally separated, divorced or surviving spouse is eligible for continuation of coverage as if the original policy had not been terminated)
• The date on which the legally separated, divorced or surviving spouse becomes insured under any other group health plan
• The date on which the legally separated, divorced or surviving spouse remarries and becomes insured under another group health plan
• The date on which the legally separated, divorced or surviving spouse attains the age of 65

For More Information   

• Small Business Health Insurance Information  
• Missouri Revised Statutes (Sections 376.428; 376.892-894) 
• Missouri Department of Insurance, Financial Institutions and Professional Registration Bulletin: 09-02

Dependent Status and Health Insurance

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.