COBRA Continuation Versus State Small Group Continuation

Written by: Rush Dixon

There has been much confusion regarding an employee’s ability to continue their coverage after termination of employment.  COBRA is a Federal law that applies to groups of 20 or more full and/or part time employees (part timers are counted on a fractional basis, depending on the hours worked; 2 half-timers counting as one full-timer for instance).  Employees and their dependents may qualify for 18-36 months of coverage depending on the qualifying event that makes them eligible (except for termination for cause).  Simple termination of an employee is 18 months.   Divorce or death of a spouse, or a child reaching maximum age under the plan is 36 months.  The employer may charge up to 102% of premium for continuation.  Groups under 20 employees follow State law to determine continuation of health benefits.  In Maryland, employees qualify for 18 months, DC is 3 months, Virginia is 3 months for HMO and 12months for PPO plans.

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