COBRA Federal and State Regulations

Chapter 176J: Section 9. Continuous coverage

Section 9. (a) Subject to the limitations set forth in this section, every carrier shall offer continuation coverage under a health benefit plan issued under this chapter to any qualified beneficiary who would lose coverage under that health benefit plan as the result of a qualifying event and who makes a written election for continued coverage under the health plan within the election period.

(b) For purposes of this section, the words “continuation coverage” shall mean coverage under the health benefit plan which meets the following requirements:

(1) The coverage shall consist of coverage which, as of the time the coverage is being provided, is identical to the coverage provided under the health benefit plan to similarly situated beneficiaries with respect to whom a qualifying event has not occurred. If coverage under the health benefit plan is modified for any group of similarly situated beneficiaries, the coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the health benefit plan pursuant to this subsection in connection with such group.

(2) The coverage shall extend for at least the period beginning on the date of the qualifying event and ending not earlier than the earliest of the following:

(i) in the case of a qualifying event described in clause (ii) of subsection (f), except as provided in clause (ii), the date which is eighteen months after the date of the qualifying event;

(ii) if a qualifying event, other than a qualifying event described in clause (vi) of said subsection (f) occurs during the eighteen months after the date of a qualifying event described in said clause (ii) of said subsection on (f), the date which is thirty-six months after the date of the qualifying event described in said (ii);

(iii) in the case of a qualifying event described in clause (vi) of said subsection (f) relating to bankruptcy proceedings, the date of the death of the former employee or qualified beneficiary described in paragraph (ii) of subsection (k) or in the case of the surviving spouse or dependent children of the former employee, thirty-six months after the date of the death of the covered employee;

(iv) in the case of a qualifying event not described in clause (ii) or (vi) of subsection (f), the date which is thirty-six months after the date of the qualifying event;

(v) in the case of a qualified beneficiary who is determined, under title II or XVI of the Social Security Act, to have been disabled at the time of a qualifying event described in said clause (ii) of said subsection (f) any reference in clause (i) or (ii) of this subsection to eighteen months with respect to such event is deemed a reference to twenty-nine months, but only if the qualified beneficiary has provided notice of such determination pursuant to paragraph (2) of subsection (j) before the end of such eighteen months;

(vi) in the case of an event described in clause (iv) of subsection (f), without regard to whether such event is a qualifying event, the period of coverage for qualified beneficiaries other than the former employee for such event or any subsequent qualifying event shall not terminate before the close of the thirty-six month period beginning on the date the covered employee becomes entitled to benefits under Title XVIII of the Social Security Act;

(vii) the date on which the carrier ceases to provide a health benefit plan to other similarly situated eligible employees of the eligible small business which formerly employed the qualified beneficiary;

(viii) the date on which coverage ceases under the plan by reason of a failure to make timely payment of any premium required under the plan with respect to the qualified beneficiary. Unless otherwise specified in this section, the payment of any premium shall be considered to be timely if made within thirty days after the date due or within such longer period as applies to or under the plan;

(ix) the date on which the qualified beneficiary first becomes, after the date of the election, (A) covered under any other health benefit plan as an employee or otherwise, which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary, or (B) in the case of a qualified beneficiary other than a qualified beneficiary described in paragraph (ii) of subsection (k) entitled to benefits under Title XVIII of the Social Security Act; or

(x) in the case of a qualified beneficiary who is disabled at the time of a qualifying event described in clause (ii) of subsection (f), the month that begins more than thirty days after the date of the final determination under Title II or XVI of the Social Security Act that the qualified beneficiary is no longer disabled.

(c) The carrier may require payment of a premium for any period of continuation coverage, except that such premium shall not exceed one hundred and two percent of the applicable premium for such period, and may, at the election of the payor, be made in monthly installments. The carrier may require that such payments and related communications be made indirectly through the former employer or through an intermediary. In no event may the carrier require the payment of any premium before the day which is forty-five days after the day on which the qualified beneficiary made the initial election for continuation coverage. In the case of an individual described in clause (v) of paragraph (2) of subsection (b) such individual after eighteenth months of the continued coverage described in clause (i) or (ii) of said paragraph (2) of said subsection (b) shall pay one hundred and fifty percent for the allowable coverage thereafter.

(d) The coverage may not be conditioned upon, or discriminated on the basis of lack of, evidence of insurability.

(e) In the case of a qualified beneficiary whose period of continuation coverage expires under said paragraph (2) of said subsection (b), the carrier shall, during the one hundred-eighty day period ending on such expiration date, provide to the qualified beneficiary the option of enrollment under a conversion nongroup health plan otherwise generally available through the carrier to similarly situated beneficiaries.

(f) For purposes of this section, the words “qualifying event” shall mean, with respect to any eligible employee, any of the following events which, but for the continuation coverage required under this section, would result in the loss of coverage of a qualified beneficiary -

(i) the death of the eligible employee;

(ii) the termination, other than by reason of such employee’s gross misconduct, or reduction of hours, of the eligible employee’s employment;

(iii) the divorce or legal separation of the eligible employee from the employee’s spouse;

(iv) the eligible employee becoming entitled to benefits under title XVIII of the Social Security Act;

(v) a dependent child ceasing to be a dependent child under the generally applicable requirements of the health benefit plan;

(vi) a proceeding in a case under Title 11, United States Code, commencing on or after July first, nineteen hundred and eighty-six, with respect to the employer from whose employment the eligible employee retired at any time.

In the case of an event described in clause (vi), a loss of coverage shall include a substantial elimination of coverage with respect to a qualified beneficiary described in paragraph (ii) of subsection (k) within one year before or after the date of commencement of the proceeding.

(g) For purposes of this section the words “applicable premium” shall mean, with respect to any period of continuation coverage of qualified beneficiaries, the premium for the health benefit plan for such period of coverage for similarly situated beneficiaries with respect to whom a qualifying event has not occurred, without regard to whether such cost is paid by the employer or employee. The determination of any applicable premium shall be made for a period of twelve months and shall be made before the beginning of such period.

(h) For purposes of this section the words “election period” shall mean the period which (i) begins not later than the date on which coverage terminates under the health benefit plan by reason of a qualifying event, (ii) is of at least sixty days’ duration, and (iii) ends not earlier than sixty days after the later of (A) the date described in clause (i), or (B) in the case of any qualified beneficiary who receives notice under paragraph (3) of subsection (j), the date of such notice.

(i) Except as otherwise specified in an election, any election of continuation coverage by a qualified beneficiary described in paragraph (i) of subsection (k) shall be deemed to include an election of continuation coverage on behalf of any other qualified beneficiary who would lose coverage under the health benefit plan by reason of the qualifying event. If there is a choice among types of coverage under the plan, each qualified beneficiary shall be entitled to make a separate selection among such types of coverage.

(j)(1) The carrier shall provide, at the time of commencement of coverage under the health benefit plan, written notice to each eligible employee and spouse of the employee, if any, of the rights provided under this section.

(2) Each eligible employee or qualified beneficiary is responsible for notifying the carrier of the occurrence of any qualifying event described in clause (iii) or (v) of subsection (f) within sixty days after the date of the qualifying event and each qualified beneficiary who is determined, under Title II or XVI of the Social Security Act, to have been disabled at the time of a qualifying event described in clause (ii) of subsection (f) is responsible for notifying the carrier of such determination within sixty days after the date of the determination and for notifying the carrier within thirty days of the date of any final determination under such title or titles that the qualified beneficiary is no longer disabled.

(3) The carrier shall notify (A) in the case of a qualifying event described in clause (i), (ii), (iv), or (vi) of subsection (f) of which the carrier has actual knowledge, any qualified beneficiary with respect to such event, and (B) in the case of a qualifying event described in clause (iii) or (v) of subsection (f) where the eligible employee notifies the carrier paragraph (2) of this subsection, any qualified beneficiary with respect to such event, of such beneficiary’s rights under this subsection.

(4) For purposes of paragraph (3) any notification shall be made within fourteen days of the date on which the carrier obtains actual knowledge of the qualifying event, and any such notification to an individual who is a qualified beneficiary as the spouse of the eligible employee shall be treated as notification to all other qualified beneficiaries residing with such spouse at the time such notification is made.

(5) The carrier may require that all notices required by this subsection be issued to qualified beneficiaries by the eligible small business or by an intermediary.

(k)(i) For purposes of this section, the words “qualified beneficiary” shall mean, with respect to a eligible employee under a health benefit plan, any other individual who, on the day before the qualifying event for that employee, is a beneficiary under the plan as the spouse of the eligible employee or as the dependent child of the employee; provided, however, that in the case of a qualifying event described in clause (ii) of subsection (f), the words “qualified beneficiary” shall also include the eligible employee.

(ii) In the case of a qualifying event described in subsection (f)(vi), the words “qualified beneficiary” shall include an eligible employee who had retired on or before the date of substantial elimination of coverage and any other individual who, on the day before such qualifying event, is a beneficiary under the plan as the spouse of the eligible employee, as the dependent child of the eligible employee or as the surviving spouse of the eligible employee.

[Clause (iii) of subsection (k) effective until July 1, 2007. For text effective July 1, 2007, see below.]

(iii) The provisions of this section shall not apply to any health benefit plan issued to an eligible small business with only one eligible employee or with greater than nineteen eligible employees.

[Clause (iii) of subsection (k) as amended by 2006, 58, Sec. 89 effective July 1, 2007. See 2006, 58, Sec. 145. For text effective until July 1, 2007, see above.]

(iii) The provisions of this section shall not apply to any health benefit plan issued to an eligible individual or eligible small business with only one eligible employee or with greater than nineteen eligible employees.

(l) In any circumstance in which more extensive coverage than that provided by this section is required pursuant to any provision of the General Laws or any law of the United States, the health benefit plan shall satisfy such other provision insofar as it requires more extensive coverage.