COBRA Federal and State Regulations

New Jersey’s Continuation of Coverage Regulation

 17B:27-60.  Written certification of creditable coverage under COBRA

20. a. A health insurer which offers a group health plan shall provide a written certification of creditable coverage at the time an individual ceases coverage or otherwise becomes covered under a COBRA continuation provision; at the time an individual ceases to be covered under a COBRA continuation provision; and upon request, on behalf of an individual not later than 24 months after the cessation of coverage under the plan or a COBRA continuation provision.

b.  The written certification of creditable coverage shall include the period of creditable coverage of the individual under the group health plan and the coverage under any COBRA continuation provision and any waiting or affiliation period imposed with respect to the individual for coverage under the plan.

L.1997,c.146,s.20.
 

 
17B:27-61.  Affiliation period imposed by HMO

21. A health maintenance organization which offers a group health plan and which does not impose a preexisting condition exclusion, may impose an affiliation period if the period is applied uniformly without regard to any health status-related factors and the period does not exceed two months, or three months in the case of a late enrollee.

L.1997,c.146,s.21.
 

17B:27-62.  Permission to enroll for group coverage

22.  A health insurer which offers a group health plan shall permit an employee or dependent who is eligible, but not enrolled, for coverage under the terms of the plan, to enroll for coverage if:

a.  the employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent, and the employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, if the health insurer required such a statement at that time and notified the employee of the insurer s requirements;

b.  the employee s or dependent s other coverage described in subsection a. of this section was under a COBRA continuation provision and coverage under that provision was exhausted or the coverage was terminated due to loss of eligibility for coverage, including legal separation, divorce, death, termination of employment and reduction in hours of employment, or to the termination of employer contributions toward that coverage; and

c.  the employee requests enrollment not later than 30 days after exhaustion of coverage under a COBRA continuation provision or termination of coverage pursuant to subsection b. of this section.

L.1997,c.146,s.22.

v7B:27-63.  Dependent special enrollment period

23.  If a group health plan makes coverage available with respect to a dependent of an individual who is a participant under the plan or has satisfied any waiting period and is eligible to be enrolled, and the dependent becomes a dependent of the individual through marriage, birth, adoption or placement for adoption, the group health plan shall provide for a dependent special enrollment period during which the dependent and individual, if necessary, may be enrolled.

The dependent special enrollment period shall be for a period of not less than 30 days and shall begin on the later of the date dependent coverage is made available or the date of marriage, birth, adoption or placement for adoption.  If an individual enrolls a dependent during the first 30 days of the dependent special enrollment period, the coverage of the dependent shall become effective: in the case of a marriage, no later than the first day of the first month after the date the completed request for enrollment is received; in the case of a dependent s birth, as of the date of birth; and in the case of a dependent s adoption or placement for adoption, the date of the adoption or placement for adoption.

L.1997,c.146,s.23.
 

17B:27-64.  Rules for eligibility, health status-related factors prohibited

24.  A health insurer which offers a group health plan may not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of the plan based on health status-related factors in relation to the individual or a dependent of the individual.

The provisions of this section shall not be construed to require a group health plan to provide particular benefits other than those provided under the terms of its coverage or to prevent the coverage from establishing limitations or restrictions on the amount, level, extent or nature of the benefits or coverage for similarly situated individuals enrolled in the coverage.

L.1997,c.146,s.24.

 
17B:27-65.  Premiums, contributions regulated

25.  A health insurer which offers a group health plan may not require an individual, as a condition of enrollment or continued enrollment under the plan, to pay a premium or contribution which is greater than the premium or contribution for a similarly situated enrollee in the plan on the basis of any health status-related factor in relation to the individual or to an enrollee  or a dependent of the individual or enrollee.  This provision shall not be construed to restrict the amount that an employer may be charged for coverage under a group health plan or to prevent a health insurer offering group health insurance coverage from establishing premium discounts or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

L.1997,c.146,s.25.

17B:27-66.  Renewal of coverage; exceptions
26.  A health insurer which offers health insurance coverage in connection with a group health plan shall renew the coverage under the plan at the option of the policy holder, except that:

a.  A health insurer may discontinue the coverage only if:

(1)  the policy holder has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the insurer has not received timely premium payments;

(2)  the policy holder has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the health insurance coverage; and

(3)  in the case of a health insurer which offers a group health plan through a network plan, there is no longer any enrollee in the plan who lives, resides or works in the service area of the insurer or in the area for which the insurer is authorized to do business; or

b.  A health insurer may not renew the health insurance coverage only if:

(1)  the policy holder has failed to comply with a material plan provision relating to employer contribution or group participation rules; or

(2)  the insurer is ceasing to offer coverage in the market in accordance with State and federal law.

c.  A health insurer may cease offering and not renew a particular type of health insurance coverage only if:

(1)  the insurer provides notice to each certificate or policy holder who is provided coverage of this type, and to participants and beneficiaries covered under the coverage of the nonrenewal at least 90 days prior to the date of the nonrenewal of the coverage;

(2)  the insurer offers the option to purchase all or any other health insurance coverage that the insurer offers; and

(3)  in exercising the option to not renew coverage of a particular type and in offering the option to purchase all or any other health insurance coverage that the insurer offers, the insurer acts uniformly without regard to the claims experience of the certificate or policy holder or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for the coverage.

d.  A health insurer may cease offering and not renew all health insurance coverage only if:

(1)  the insurer provides notice to the Department of Banking and Insurance and each employer and participants and beneficiaries covered under the health insurance coverage, of the nonrenewal at least 180 days prior to the date of the nonrenewal;

(2)  the insurer ceases offering all health insurance coverage issued or delivered for issuance in the State for groups under the provisions of sections 14 through 27 of P.L.1997, c.146 (C.17B:27-54 through C.17B:27-67) and coverage under the health insurance coverage is not renewed; and

(3)  the insurer may not provide for the issuance of any health insurance coverage for groups in this State under the provisions of sections 14 through 27 of P.L.1997, c.146 (C.17B:27-54 through C.17B:27-67), during a five-year period beginning on the termination date of the last health insurance coverage that was not renewed.

L.1997,c.146,s.26.
 

17B:27-67.  Modification of coverage

27.  At the time of coverage renewal, a health insurer may modify the health insurance coverage for a product offered to a group health plan.

L.1997,c.146,s.27.
 

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Coverage of Young Adults through the Dependent Under 31 Law

New Jersey’s mini Cobra applies to individuals who work for an employer with 2-49 employees.

The law allows varying time periods of continuation coverage with COBRA, depending on the reason for coverage loss:

• 18 months in case of job loss or reduction of work hours for employees, spouse, and dependents
• 36 months in case of employee death or divorce for spouse and dependants
• 36 months in case of losing dependant status
• 29 months in case of disability, as described in Social Security Act

Employers must notify employees of qualifying event and of continuation of coverage rights in a coverage certificate once insurance starts.

Premiums should not exceed 102 percent. Employees have 30 days after their COBRA election to pay the first month’s premium.

Continuation of coverage may end prematurely, if:

• Employer terminates all of its group health plans
• Premiums are not paid on time
• Employee becomes covered under another health plan or entitled for Medicare

Coverage until 30

New Jersey’s law also has a provision that requires insurers to provide continued coverage for dependent, following cessation of coverage at “age-out” time until the dependent turns 30 years old.

Dependent has 30 days before “ageing-out” period. If had aged-out and had not elected coverage

In this case, coverage terminates when

• Member is not considered legally dependent
• Premiums are paid late
• The plan’s main beneficiary loses coverage contract

Disability and Coverage

Health insurance policies must provide continuation of coverage to employees and dependants who otherwise would be ineligible for insurance due to complete disability. In order to elect coverage, individuals must have been covered for 3 months prior to cessation. Eligible individuals and dependants should notify employer in writing and pay the first month’s premium within 31 days. Continuation of insurance terminates when an individual:

• Doesn’t pay the premium
• Becomes eligible for coverage under another employer’s group health plan
• Termination of the group plan

Death

In case a covered employee should die, continuation of health insurance must be available for total of 180 days (6 months). A time period of 31 days is given to continue coverage.

Two Substantial Differences from the Federal Law

New Jersey law only fives 30 days to elect coverage, while federal law provides 60 days.

Likewise, New Jersey’s law requires that premiums be paid within 30 to 31 days of election of coverage, whereas COBRA allows 45-day period for payment.

No Conversion Option

New Jersey does not have a conversion option for persons leaving a group health plan because New Jersey is a guaranteed issue state for the individual health market.