COBRA and state continuation

State Continuation Requirements

In addition to federal COBRA continuation requirements, most states have their own coverage continuation requirements. State continuation requirements apply only to fully-insured plans in the state in which the plan is issued. It is not tied to where a particular employee resides, or even where the employer may be operating.  For example, a fully-insured group health plan issued by a carrier in Minnesota would be subject only to Minnesota state continuation requirements even if the employer has office locations and/or employees residing outside of Minnesota. 

The continuation requirements vary greatly from state to state as to which employer plans are subject to the rules, the length of continuation coverage required, notice requirements,  and election and payment procedures. In many cases, state continuation requirements apply solely to small employers (less than 20 employees) or other employers who are exempt from federal COBRA continuation requirements (e.g. churches, schools). However, in some cases, state continuation requirements work in conjunction with federal COBRA continuation requirements, perhaps expanding beyond the continuation rights available under federal rules.  

Examples

California state continuation rules apply to fully-insured employers of all sizes, requiring 36 months of continuation coverage (potentially extending what is already required under federal COBRA rules). 

Florida state continuation rules apply only to employers with less than 20 employees. 

Employers offering fully-insured plans should coordinate with the carrier to understand any state continuation of coverage and notification requirements in the state in which the plan is issued. In some cases, the carriers will assist in administering such requirements, but the employer needs to understand any requirements that are the employer’s responsibility.