Managing Changes in the Workplace- Continuing Health Coverage: COBRA and State Continuation

During this time of uncertainty, you’re more mindful than ever of the health and wellbeing of your employees. And as your workplace has likely experienced change, you should be equipped with the right information to help make them feel safe and supported.

If you are an employer who provides health benefits, your employees have options if they would lose their health insurance due to termination, reduction in hours or a change in their family status.

But what are those benefits? What are your employees eligible to receive?

The quick answer:

  • COBRA: For employers who provide group health coverage with 20 or more employees*
  • State Continuation: For employers who provide group health coverage with less than 20 employees.

COBRA

If your organization employs 20 or more people, you likely know federal law requires you to offer continued coverage to those who lose benefits because of termination, reduction in hours or a change in their family status. The law is known as COBRA, or the Consolidated Omnibus Budget Reconciliation Act.

Under COBRA, the employee or family member may qualify to temporarily continue their group health plan benefits at their own expense for a certain period of time. The following represents some basic information on periods of continuation coverage:

Qualifying EventQualifying BeneficiariesMaximum period of continuation coverage*
Termination or reduction in hoursEmployee, spouse, dependent child18 months
Employee enrollment in MedicareSpouse, dependent child36 months
Divorce or legal separateSpouse, dependent child36 months
Death of employeeSpouse, dependent child36 months

As the employer, you must notify your plan administrator, like Blue Cross and Blue Shield of Kansas (BCBSKS), if one of these qualifying events has occurred to an employee. Then, the plan administrator will notify the qualifying beneficiaries of their right to elect continuation coverage. 

State Continuation

In 2008, Kansas enacted the Health Care Reform Act that allows employees—and their spouses and dependents—the option to continue their employer-sponsored health coverage if they work for a small business (under 20 employees.)

Employees are eligible for 18 months of coverage with the same group health plan benefits at their own expense.

For employees who have already met their out-of-pocket maximum or would rather not figure out a new plan, network, etc., State Continuation can help ease the transition for whatever comes next.

If you are an employer with BCBSKS insurance and administer COBRA or State Continuation, we have the resources – and people – to help you navigate these benefits. These resources will give you practical help and provide peace of mind.

  • View the Continuing Coverage guidelines within our Group Administrator Manual for more information, employee forms and notices.
  • Contact your sales representative with any questions you have and tools you need to confidently administer COBRA or State Continuation benefits.
  • For additional resources about managing changes in the workplace, visit our resource center.

*For specific eligibility rules, refer to our Group Administrator Manual or visit the Employee Benefits Security Administration (dol.gov/agencies/ebsa) for notice templates, Frequently Asked Questions and more.

Leave a Reply