Continuation of Benefits in North Carolina (NC)

Group insurance policies in North Carolina that provide hospital, surgical or medical benefits (other than for specific diseases or for accidental injuries only) are required to offer continuation coverage. Continuation is not required to include dental, vision care or prescription drug benefits, if offered separately. 

Qualified Beneficiaries

An employee, spouse or dependent child covered by the group policy at the time of the qualifying event. Continuation is only available to qualified beneficiaries who have been continuously insured under the group policy during the three consecutive months immediately prior to the date of the qualifying event.  

Continuation is not available for any person:

• Who is or could be covered by any other group hospital, surgical or medical coverage, whether insured or uninsured, within 31 days immediately following the date of the qualifying event; or 
• Whose insurance terminated for failure to pay premiums.

Qualifying Events

Continuation coverage must be offered to qualified beneficiaries when health insurance under the group policy would otherwise terminate because of an employee's:

• Termination of active employment (for any reason); or
• Termination of membership in the eligible class or classes under the policy.

Maximum Continuation Period

18 months.

Employer/Employee Notice Requirements

• Notice of the right to continue group health coverage must be included in each individual certificate of coverage. Although not required, an employer may also give notice orally or in writing as part of the exit process from employment. 
• The employee must elect continuation coverage in writing. Individuals must be given at least 60 days after the date of termination or loss of eligibility to elect continuation coverage.

Premium Payments

Premiums for continuation of coverage may not exceed 102% of the full group rate. The first premium payment must be made at the time the employee makes his or her election to continue coverage. After the first payment, all other payments for continuation coverage must be paid in advance. There is no grace period required under state continuation coverage law.

Early Termination of Coverage

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

• Failure to pay required premium contributions;
• The qualified beneficiary becomes eligible for (or becomes covered under) another group plan providing similar benefits; or
• The group policy is terminated by the employer. However, if the employer replaces the group policy with another group policy, the employee or dependent is entitled to continue under the successor policy for any unexpired period of continuation.