Code 62 requires plans with 2-19 employees can qualify for 18 months.
Minnesota Statutes Chapter 62A-17
62A.17 TERMINATION OF OR LAYOFF FROM EMPLOYMENT; CONTINUATION
AND CONVERSION RIGHTS.
Subdivision 1. Continuation of coverage. Every group insurance policy, group subscriber
contract, and health care plan included within the provisions of section 62A.16, except policies,
contracts, or health care plans covering employees of an agency of the federal government, shall
contain a provision which permits every covered employee who is voluntarily or involuntarily
terminated or laid off from employment, if the policy, contract, or health care plan remains in
force for active employees of the employer, to elect to continue the coverage for the employee
and dependents.
An employee shall be considered to be laid off from employment if there is a reduction in
hours to the point where the employee is no longer eligible under the policy, contract, or health
care plan. Termination shall not include discharge for gross misconduct.
Upon request by the terminated or laid off employee, a health carrier must provide the
instructions necessary to enable the employee to elect continuation of coverage.
Subd. 2. Responsibility of employee. Every covered employee electing to continue coverage shall pay the former employer, on a monthly basis, the cost of the continued coverage. The
policy, contract, or plan must require the group policyholder or contract holder to, upon request,
provide the employee with written verification from the insurer of the cost of this coverage
promptly at the time of eligibility for this coverage and at any time during the continuation period.
If the policy, contract, or health care plan is administered by a trust, every covered employee
electing to continue coverage shall pay the trust the cost of continued coverage according to the
eligibility rules established by the trust. In no event shall the amount of premium charged exceed
102 percent of the cost to the plan for such period of coverage for similarly situated employees
with respect to whom neither termination nor layoff has occurred, without regard to whether
such cost is paid by the employer or employee.
The employee shall be eligible to continue the
coverage until the employee becomes covered under another group health plan, or for a period
of 18 months after the termination of or lay off from employment, whichever is shorter. If the
employee becomes covered under another group policy, contract, or health plan and the new
group policy, contract, or health plan contains any preexisting condition limitations, the employee
may, subject to the 18-month maximum continuation limit, continue coverage with the former
employer until the preexisting condition limitations have been satisfied. The new policy, contract,
or health plan is primary except as to the preexisting condition. In the case of a newborn child
who is a dependent of the employee, the new policy, contract, or health plan is primary upon the
date of birth of the child, regardless of which policy, contract, or health plan coverage is deemed primary for the mother of the child.
Subd. 3.[Repealed by amendment, 1987 c 337 s 50]
Subd. 4. Responsibility of employer. After timely receipt of the monthly payment from a
covered employee, if the employer, or the trustee, if the policy, contract, or health care plan is
administered by a trust, fails to make the payment to the insurer, nonprofit health service plan
corporation, or health maintenance organization, with the result that the employee's coverage is
terminated, the employer or trust shall become liable for the employee's coverage to the same
extent as the insurer, nonprofit health service plan corporation, or health maintenance organization
would be if the coverage were still in effect.
In the case of a policy, contract or plan administered by a trust, the employer must notify
the trustee within 30 days of the termination or layoff of a covered employee of the name and
last known address of the employee.
If the employer or trust fails to notify a covered employee, the employer or trust shall
continue to remain liable for the employee's coverage to the same extent as the insurer would be
if the coverage were still in effect.
Subd. 5. Notice of options. Upon the termination of or lay off from employment of an eligible
employee, the employer shall inform the employee within ten days after termination or lay off of:
(a) the right to elect to continue the coverage;
(b) the amount the employee must pay monthly to the employer to retain the coverage;
(c) the manner in which and the office of the employer to which the payment to the employer must be made; and
(d) the time by which the payments to the employer must be made to retain coverage.
If the policy, contract, or health care plan is administered by a trust, the employer is relieved
of the obligation imposed by clauses (a) to (d). The trust shall inform the employee of the
information required by clauses (a) to (d).
The employee shall have 60 days within which to elect coverage. The 60-day period shall
begin to run on the date plan coverage would otherwise terminate or on the date upon which
notice of the right to coverage is received, whichever is later.
Notice must be in writing and sent by first class mail to the employee's last known address
which the employee has provided the employer or trust.
A notice in substantially the following form shall be sufficient: "As a terminated or laid off
employee, the law authorizes you to maintain your group medical insurance for a period of up to
18 months. To do so you must notify your former employer within 60 days of your receipt of this
notice that you intend to retain this coverage and must make a monthly payment of $.......... to
........... at .......... by the ............... of each month."
Subd. 6. Conversion to individual policy. A group insurance policy that provides
posttermination or layoff coverage as required by this section shall also include a provision
allowing a covered employee, surviving spouse, or dependent at the expiration of the
posttermination or layoff coverage provided by subdivision 2 to obtain from the insurer offering
the group policy or group subscriber contract, at the employee's, spouse's, or dependent' option
and expense, without further evidence of insurability and without interruption of coverage,
an individual policy of insurance or an individual subscriber contract providing at least the
minimum benefits of a qualified plan as prescribed by section 62E.06 and the option of a number
three qualified plan, a number two qualified plan, and a number one qualified plan as provided
by section 62E.06, subdivisions 1 to 3, provided application is made to the insurer within 30
days following notice of the expiration of the continued coverage and upon payment of the
appropriate premium. The required conversion contract must treat pregnancy the same as any
other covered illness under the conversion contract. A health maintenance contract issued by a
health maintenance organization that provides posttermination or layoff coverage as required by
this section shall also include a provision allowing a former employee, surviving spouse, or
dependent at the expiration of the posttermination or layoff coverage provided in subdivision
2 to obtain from the health maintenance organization, at the former employee's, spouse's, or
dependent's option and expense, without further evidence of insurability and without interruption
of coverage, an individual health maintenance contract. Effective January 1, 1985, enrollees who
have become nonresidents of the health maintenance organization's service area shall be given
the option, to be arranged by the health maintenance organization, of a number three qualified
plan, a number two qualified plan, or a number one qualified plan as provided by section 62E.06,
subdivisions 1 to 3 . This option shall be made available at the enrollee's expense, without further
evidence of insurability and without interruption of coverage.
A policy providing reduced benefits at a reduced premium rate may be accepted by the
employee, the spouse, or a dependent in lieu of the optional coverage otherwise required by
this subdivision.
The individual policy or contract shall be renewable at the option of the individual as
long as the individual is not covered under another qualified plan as defined in section 62E.02,
subdivision 4 . Any revisions in the table of rate for the individual policy shall apply to the covered
person's original age at entry and shall apply equally to all similar policies issued by the insurer.
History: 1974 c 101 s 2; 1975 c 100 s 1-3; 1976 c 142 s 2,3; 1977 c 409 s 2; 1983 c 44 s 1,2;
1983 c 263 s 9; 1984 c 464 s 7; 1Sp1985 c 10 s 60; 1986 c 444; 1987 c 337 s 50; 1988 c 434 s 2;
1989 c 330 s 17; 1990 c 403 s 1; 1992 c 564 art 4 s 6; 2001 c 215 s 9
Federal COBRA law
Under COBRA, a terminated employee is entitled to continue his or her group health insurance for 18-36 months. The employee is entitled to the same coverage as current employees, since it is a seamless continuation of the current plan.
Cobra Insurance Notice
Most problems and confusion regarding COBRA Insurance involve misinformed employers who aren't aware they're supposed to offer employees COBRA. Read our Sample COBRA Notice. Also some employees thinking they should get their COBRA upon termination. Read about COBRA notification time requirements.
COBRA Insurance Cost
The 65% COBRA subsidy was for employees losing their health insurance from
Sept. 1, 2008 to after May 31st, 2010. That was part of the stimulus bill. Now the employee will be required to pay the full cost of health insurance, including any portion formerly paid by the employer. In addition, the employer can charge a 2% COBRA administration fee, bringing the total payment to 102% of the premium.
Who Qualifies for COBRA?
Employers with over 20 full time employers usually have to offer COBRA to an employee within 45-60 days of the qualifying event. Qualifying events include the employee losing their health insurance for a variety of reasons including a reduction in hours or termination. Dependents who lose insurance for other reasons, such as divorce, also qualify for COBRA. Exceptions include employees terminated for willful gross misconduct, employers with less than 20 total employees, non profits or churches organizations.
No Mini Cobra Coverage
47 of the 50 U.S. states have COBRA laws that cover smaller employers, generally called state mini-cobra laws. States that have not passed a mini-cobra law include Alabama, Alaska, and Delaware.
Among States that have mini-cobra laws, the lengths of coverage vary from 30 days to 36 months. Please refer to our Mini State COBRA Law Directory.
Written by Craig J. Casey
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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About COBRA
Employers who offer group health care plans to a minimum of 20 employees must comply with ERISA (the Employee Retirement Income Security Act of 1974). The Federal version or the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), requires that most group health plans provide 18-36 months of continuing health insurance.
