Complying with federal COBRA laws isn’t enough. Companies also need to comply with state health plan continuation laws, sometimes called mini-COBRAs.
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), workers and their dependents have the right to continue their health benefits after a qualifying event, such as job loss, a reduction in hours, divorce or death. Coverage must last for at least 18 or 36 months, depending on the type of qualifying event. Employers with 20 or more employees must comply or risk expensive penalties and lawsuits.
This is all on the federal level. States have their own health plan continuation laws, and they can be much stricter.
State COBRA requirements
In many states, employers that are exempt from health care continuation requirements under federal law may not be exempt under state law. In Maryland, for example, employers with fewer than 20 employees must offer health plan continuation for 18 months.
Other states have different requirements for the coverage period. In 2012, Delaware passed its own mini-COBRA laws. Beneficiaries who qualify under Delaware’s laws but not federal COBRA laws receive coverage for only nine months.
In many states, these mini-COBRA laws only apply to certain plans. The Massachusetts law, for example, requires employers with 2 to 19 employees to offer continued coverage to qualified beneficiaries, but this does not apply to companies with self-funded plans.
These are only a few examples. Currently, 40 states have their own mini-COBRA laws. Washington, D.C. also has its own laws.
Complying with all of these regulations presents a challenge for companies. This is especially true for companies that operate in multiple states and therefore have multiple mini-COBRA laws to follow. Add to this the fact that state regulations can change, and compliance becomes a truly time-consuming task.
One mistake could have major consequences, including penalties and lawsuits.
The easy solution
Travisoft’s COBRA administration solutions include built-in state continuation options. With these solutions, there’s no complicated setup and no need to check for new laws. Simply select the relevant states from a drop-down menu and you’re done.
Don’t waste time or risk non-compliance trying to track state mini-COBRA laws on your own. Help is available. To learn more, contact Travisoft today.