Illinois State COBRA Law

With the high costs of medical care, some form of health benefits is very important to most individuals and families. No laws require employers to provide health benefits for their employees or their families. However, if you are covered by an employer's health benefits, it can be devastating to lose them.

State and federal laws give certain employees, spouses and dependent children the right to continue employer-sponsored health benefits at group rates if they lose their benefits because of specific "qualifying events." The type of qualifying event determines who is qualified for continued coverage and for how long.

This fact sheet provides specific information on the Illinois Continuation Law and compares its basic provisions to two other continuation laws: the Illinois Spousal Continuation Law and the federal continuation requirements under COBRA (the Consolidated Omnibus Budget Reconciliation Act). Under all three laws:

The employer or plan administrator must notify you of your right to continue your health benefits when certain qualifying events have occurred. If both the state and federal laws apply to your situation, your employer or plan administrator must offer you both options. You must choose one or the other option.

NOTE: In some cases, the spouse or former spouse must notify the employer and/or insurer that a qualifying event, such as divorce from or death of the covered employee, has occurred. If you don't give proper notification, you may lose your continuation rights.

Once you are offered continuation, you must elect to continue coverage within a certain time period, called the election period. If you don't tell the employer you want to continue coverage before the election period expires, you may lose your right to continue coverage. If you have the option of either the state or federal continuations, once you make your choice, if the election period has expired, you can't change your decision.
Coverage will continue for the maximum amount of time required by law. However, coverage may end earlier in some cases, such as when the beneficiary becomes eligible for Medicare, or if the employer no longer offers any group health insurance benefits for employees.
You must pay the entire premium for the coverage, including the part you used to pay as well as the part the employer paid before the qualifying event.

Your group insurance certificate, evidence of coverage or benefit plan summary booklet explains your options and responsibilities in detail. You should read the information now. Don't wait until you need your continuation rights.

This comparison is a general comparison. For specific information regarding each continuation option, please refer to the specific Fact Sheet.
Comparison of Laws Pertaining to Continuation of Health Benefits
Illinois Continuation	Illinois Spousal Continuation	COBRA
Must be offered to employer groups of any size.	Must be offered to employer groups of any size. Does not apply to HMO coverage.	Must be offered to employer groups with 20 or more employees.
Must be covered for 3 continuous months before qualifying event.	Divorced or widowed spouses (any age), spouses (age 55 or older) of retired employees, and dependent children must be covered on the day prior to the qualifying event.	Must be covered by the group plan on the day prior to the qualifying event.
Must be provided upon termination of employment unless termination is due to theft or commission of work related felony.	Must be offered to divorced spouse or widowed spouse and dependent children upon divorce from or death of employee. Must be offered to spouse(age 55 or older) and dependent children of retiree upon employee's retirement.	Must be offered to employee & covered dependents upon termination of employment ; upon employee's retirement; upon reduction in employee's hours; Must be offered to spouse, former spouse & covered dependents upon employee's eligibility for Medicare; upon divorce or legal separation from employee; upon death of employee; upon loss of dependent child status under plan.
Coverage must be the same as under group plan but need not include extra benefits such as dental, vision or prescription drugs.	Coverage must be the same as under group plan.	The employer must offer the same coverages at the same benefit levels as those offered to the rest of the group.
Coverage is for maximum of 9 months.	Spouses under age 55 - Divorced or widowed spouse and dependent children - coverage is provided for a maximum of 2 years. Spouses age 55 or older - Divorced or widowed spouse or spouse of retiree and dependent children - coverage is provided until spouse is eligible for Medicare.	Loss of employement or reduced hours - For employee and covered dependents, maximum of 18 months. May be extended to 29 months if disabled. Divorce or legal separation from employee, death of employee or employee entitled to Medicare - Maximum of 36 months for spouse, former spouse and dependent children. Loss of dependent child status - Maximum 36 months.
Premiums may not exceed group rate.	Spouses under age 55 - Divorced or widowed spouses premium may not exceed group rate. Spouses age 55 or older - Divorced or widowed spouse or spouse of retiree, administration fee may be added to group rate after first two years of coverage.	Premium may not exceed 102% of group rate. Plan may charge 150% after 18 months if the 11 month extension for disability is granted.

What Is The Illinois Continuation Law?

The Illinois Continuation Law protects individuals who lose their group health insurance coverage with an employer group of any size due to termination of employment.

Which Employers Must Offer Continuation Coverage Under The Illinois Law?

Employers offering fully insured group and accident health plans, regardless of the group's size;

Employers offering fully insured HMO coverage, regardless of the group's size.

The Illinois law does not apply to:

Self-insured employers;
Health and welfare benefit plans, such as union plans;
Insurance policies or trusts written in other states.

Note: For HMOs, the law does apply to contracts written outside of Illinois if the HMO member is a resident of Illinois and the HMO has established a provider network in Illinois. To determine if your HMO coverage provides Illinois continuation, contact the HMO or check your certificate of coverage.

Who Is Eligible For Continuation Coverage Under The Illinois Law?

Continuation of coverage must be offered to you and your eligible dependents who were continuously covered under group coverage for three months prior to termination of employment.

Illinois continuation does not apply if:

You were terminated for committing a work-related felony and have admitted to or been convicted of such felony;
You were terminated for a work-related theft for which your employer was in no way responsible and you have admitted to or been convicted of such theft;
You are covered by Medicare;
You are covered by any other insured or self-insured plan of group hospital, surgical or medical coverage.

What Are The Notification Deadlines?

Your employer must notify you in writing of your right to Illinois continuation coverage upon termination of your employment.

You must request such continuation in writing within the ten-day period following the later of: (1) the date of employment termination; or (2) the date you are given written notice of your right to continuation.

IN NO EVENT, may you elect Illinois continuation more than 60 days after the date of employment termination.

How Much Will Illinois Continuation Coverage Cost?

The premium for Illinois continuation coverage for you, your spouse and dependent children may not exceed that of the group rate. You are responsible for paying the entire premium for the coverage, including the portion which was formerly paid by your employer.

What Benefits Are Available With Illinois Continuation Coverage?

Benefits for hospital, surgical or major medical are the same as they were under your previous group coverage. However, dental, vision care, prescription drug benefits, disability income, specified disease benefits and supplementary benefits are not required and may no longer be available under the continuation coverage.

How Long Does Illinois Continuation Coverage Last?

Continuation coverage must be provided for nine months after the date your insurance stops because your employment is terminated.

Continuation coverage may terminate earlier than nine months if:

You become eligible for Medicare;
You are covered by any other insured or self-insured group medical, hospital or surgical plan;
You fail to make timely premium payments for coverage;
Your employer's group policy is terminated in its entirety and not replaced with another group policy.

What Happens When My Illinois Continuation Ends?

You and your dependents may convert coverage to an individual policy at any time during the continuation period or at the end of the period, except when the continuing person becomes eligible for Medicare.

You may also want to shop around for an individual policy on your own. You may be able to find better coverage at a more affordable rate. An insurance broker in your area can assist you in applying for individual coverage.

If you or your dependents have a medical condition which precludes the purchase of individual coverage, the HIPAA CHIP plan offered by the Illinois Comprehensive Health Insurance Plan may be an option when the continuation policy expires. This plan provides coverage for individuals with an uninsurable health condition, without preexisting condition exclusions or limitations, if there has not been a break in coverage of more than 90 days. We encourage you to apply for the HIPAA CHIP plan at least two months prior to your Illinois Continuation coverage expiration in order to allow ample time for the application to be processed. You should contact the Illinois Comprehensive Health Insurance Plan (ICHIP) at (866)851-2751 or at http://www.chip.state.il.us/chip.htm for an application.

NOTE: If you have a medical condition that renders you uninsurable and you elect a conversion policy rather than HIPAA CHIP, you will lose your rights to elect HIPAA CHIP. In other words, if you elect the conversion policy and then decide, for whatever reason, to drop it, You will not be eligible for the HIPAA CHIP plan. You will have to apply for coverage with the regular CHIP plan, which sometimes has a waiting list and does not pay for preexisting conditions for the first six months of coverage.

For More Information

Call our Consumer Services Section at (312) 814-2427 or
our Office of Consumer Health Toll Free at (877) 527-9431
or visit us on our website at www.ins.state.il.us

A copy of the law is available, 215 ILCS 5/367(e) for insurance companies and 215 ILCS 125/4-9.2 for HMOs.