Managing Your Health Care

Questions about COBRA and Continuation Coverage

If the employee dies, will a surviving dependent be able to continue coverage?
Minnesota law requires fully-insured group plans to continue coverage for the surviving spouse and children. Coverage must continue until the spouse and children are covered by another group policy or the coverage would have ended anyway. The premiums for the survivors’ coverage cannot exceed 102 percent of the cost of the plan for other employees, including any portion paid by the employer. Under a self-insured plan, the surviving spouse and dependents may continue coverage for up to 36 months, or until they are covered by another plan.

What are the continuation privileges in the event of divorce or legal separation?
If you have fully-insured group coverage, or individual health coverage that provides benefits for spouses and dependent children, coverage continues after divorce or separation. The coverage continues until the former spouse has other coverage or the coverage would have ended anyway. With individual and fully-insured group coverage, the insurer may not charge an additional premium to the former spouse. With self-insured group coverage, the former spouse must pay an additional premium, and the coverage is limited to 36 months.

The dependent children have coverage until they are covered by another plan or the coverage would have ended anyway. For example, once children reach the maximum age for coverage it may be terminated. (The maximum age for dependents is stated in the policy.) At the expiration of the continuation coverage, the former spouse and dependents have the right to obtain an individual policy from the insurer, within 30 days following notice of the expiration.

What benefits are available when the individual policyholder or the employee covered by the fully-insured group coverage plan becomes eligible for Medicare?
If you become eligible for Medicare, your spouse and dependent children may continue with your health coverage for up to 36 months. If your spouse or child changes insurance plans, or the original plan ends, then the coverage is terminated.

The spouse and dependent children must pay the employer 102 percent of the cost of the premium, including any employer contributions.

What continuation is available to children once they have reached the maximum age of coverage in the policy?
When children reach the maximum age of coverage, as defined in the contract, the child may continue coverage for up to 36 months by electing continuation. The coverage for the child would cost 102 percent of the premium, including any employer contributions.

Can an employee continue his or her group coverage if they become disabled?
If an employee covered by a fully-insured group plan becomes disabled, the employee may continue coverage indefinitely. To do this, the employee must pay the premium directly to the employer. The employee will be required to pay the entire cost of the premium, including any premium formerly paid by the employer.

If a disabled employee is covered by a self-insured plan, the employee may keep coverage for the original 18 months plus an additional 11 months. However, for the additional 11 months the employer may increase the cost of the plan to 150 percent of the plan’s total cost of coverage.

Can you continue coverage if you quit your job or if your employer terminates your employment?
If employment ends for reasons other than willful misconduct, an employee covered under a fully-insured group policy is entitled to continue coverage. You may keep coverage for 18 months or until you become insured in another plan. The cost to continue cannot exceed 102 percent of the cost paid by employees still working. The cost includes any portion paid by the employer.

If an employer terminates your employment, for reasons other than willful misconduct, the employer must let you know that you may continue health care coverage.

When coverage ends under a health plan, or when the insured has exhausted continuation, may a consumer purchase an individual conversion policy?
A person who has used all possible continuation coverage is entitled to individual coverage from their current insurer without needing to provide evidence of insurability and without interruption of coverage. In addition to private health insurance, certain government plans cover some people. If you have web access, most of the programs listed are described at www.dhs.state.mn.us. If you do not have access to the Internet, you may be able to do so at your local public library.

Additional Information

The Employee Benefits Security Administration (“EBSA”) publishes a free guide for federally regulated health plans entitled An Employee’s Guide to Health Benefits Under COBRA. If you would like a copy of the publication, you may call the EBSA at (866) 444-EBSA (3272) or go online at www.dol.gov/agencies/ebsa.