Employer groups with 20 or more employees are regulated by Federal COBRA guidelines. COBRA eligible benefits include group Health, Dental, Vision, Flexible Spending Arrangements (FSA), Health Reimbursement Arrangements (HRA), and Employee Assistance Programs (EAP). The maximum eligible COBRA period varies from 18, 29, or 36 months depending on the Qualifying Event. “State Continuation” is a state-based requirement, similar to COBRA, that generally applies to group health insurance policies of employers with fewer than 20 employees. In some states, the “state continuation” coverage rules also apply to larger group insurance policies and add to COBRA protections. For example, in some states, if you're leaving a job-based plan, you must be allowed to continue your coverage until you reach the age of Medicare eligibility. These guidelines are specific to each state so it is important to know the regulations for your specific state. Some aspects of COBRA and State Continuation are very similar. However, it is very important that Employers know if they are classified as COBRA or State Continuation.
For instance: An Employer with less than 20 employees may not offer a terminating employee the option to continue a group Dental plan when only health plans and HRAs are State Continuation eligible benefits. However, an Employer with 20 or more employees is required to offer a terminating employee the option to continue a group Dental plan because it is a COBRA eligible benefit. Failure to offer a COBRA eligible benefit will put the Employer at risk for penalties and fees for non-compliance.
For more information about either COBRA or State Continuation services, please email or call us. We are here to help!