Weekly HR News - COBRA and State Continuation Coverage

COBRA and State Continuation Coverage

Weekly HR News – FMLA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a health benefit program enacted by the federal government in 1986 that applies to employers (cities) with 20 or more employees.  State Continuation Coverage is a very similar law that covers Kentucky cities with fewer than 20 employees (KRS 304.18-110).

COBRA, as well as State Continuation Coverage, allows an employee to continue to receive employer-provided health benefits at the expense of the employee after the employee becomes ineligible for coverage under the employer’s personnel policies due to a “qualifying event”.

A qualifying event could include the death of a covered employee, termination of an employee for any reason other than gross misconduct, reduction in the hours, divorce or legal separation of a covered employee and spouse, or a child’s loss of dependent status.

Both of these laws require that coverage must be offered to “qualified beneficiaries.” A qualified beneficiary is an employee, a spouse of an employee, a former spouse of an employee, or an employee’s dependent child who was covered by the city’s group health plan the day before the qualifying event occurred.

An employer must provide one of the above options, but an employee does not have to participate.  One option for employees is the health insurance marketplace (Marketplace). The Marketplace offers health insurance that includes comprehensive coverage, from doctors and medications to hospital visits. For more information, visit https://kyenroll.ky.gov/.  A second option may be what is considered a “special enrollment” into other group health insurance that may be available through their spouse or parent within 30 days of losing their coverage.

More information on all of these options can be found at http://insurance.ky.gov/static_info.aspx?static_id=120&Div_id=16.

For additional questions regarding COBRA, State Continuation Coverage or any other personnel related matters contact Andrea Shindlebower.