COBRA Federal and State Regulations

Georgia’s Mini-Cobra Statute

Official Code of Georgia Annotated

Title 33, Chapter 24,

Sections 33-24-21.1 and 33-24-21.2.

33-24-21.1.

(a) As used in this Code section, the term:

(1) ‘Creditable coverage’ under another health benefit plan means medical expense coverage with no greater than a 90 day gap in coverage under any of the following:

(A) Medicare or Medicaid;

(B) An employer based accident and sickness insurance or health benefit arrangement;

(C) An individual accident and sickness insurance policy, including coverage issued by a health maintenance organization, nonprofit hospital or nonprofit medical service corporation, health care corporation, or fraternal benefit society;

(D) A spouse´s benefits or coverage under medicare or Medicaid or an employer based health insurance or health benefit arrangement;

(E) A conversion policy;

(F) A franchise policy issued on an individual basis to a member of a true association as defined in subsection (b) of Code Section 33-30-1;

(G) A health plan formed pursuant to 10 U.S.C. Chapter 55;

(H) A health plan provided through the Indian Health Service or a tribal organization program or both;

(I) A state health benefits risk pool;

(J) A health plan formed pursuant to 5 U.S.C. Chapter 89;

(K) A public health plan; or

(L) A Peace Corps Act health benefit plan.

(2) ‘Eligible dependent’ means a person who is entitled to medical benefits coverage under a group contract or group plan by reason of such person´s dependency on or relationship to a group member.

(3) ‘Group contract or group plan’ is synonymous with the term ‘contract or plan’ and means:

(A) A group contract of the type issued by a nonprofit medical service corporation established under Chapter 18 of this title;

(B) A group contract of the type issued by a nonprofit hospital service corporation established under Chapter 19 of this title;

(C) A group contract of the type issued by a health care plan established under Chapter 20 of this title;

(D) A group contract of the type issued by a health maintenance organization established under Chapter 21 of this title; or

(E) A group accident and sickness insurance policy or contract, as defined in Chapter 30 of this title.

(4) ‘Group member’ means a person who has been a member of the group for at least six months and who is entitled to medical benefits coverage under a group contract or group plan and who is an insured, certificate holder, or subscriber under the contract or plan.

(5) ‘Insurer’ means an insurance company, health care corporation, nonprofit hospital service corporation, medical service nonprofit corporation, health care plan, or health maintenance organization.

(6) ‘Qualifying eligible individual’ means:

(A) A Georgia domiciliary, for whom, as of the date on which the individual seeks coverage under this Code section, the aggregate of the periods of creditable coverage is 18 months or more; and

(B) Who is not eligible for coverage under any of the following:

(i) A group health plan, including continuation rights under this Code section or the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA);

(ii) Part A or Part B of Title XVIII of the federal Social Security Act; or

(iii) The state plan under Title XIX of the federal Social Security Act or any successor program.

(b) Each group contract or group plan delivered or issued for delivery in this state, other than a group accident and sickness insurance policy, contract, or plan issued in connection with an extension of credit, which provides hospital, surgical, or major medical coverage, or any combination of these coverages, on an expense incurred or service basis, excluding contracts and plans which provide benefits for specific diseases or accidental injuries only, shall provide that members and qualifying eligible individuals whose insurance under the group contract or plan would otherwise terminate shall be entitled to continue their hospital, surgical, and major medical insurance coverage under that group contract or plan for themselves and their eligible dependents.

(c) Any group member or qualifying eligible individual whose coverage has been terminated and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits which it replaces, for at least six months immediately prior to such termination, shall be entitled to have his or her coverage and the coverage of his or her eligible dependents continued under the contract or plan. Such coverage must continue for the fractional policy month remaining, if any, at termination plus three additional policy months upon payment of the premium by cash, certified check, or money order, at the option of the employer, to the policyholder or employer, at the same rate for active group members set forth in the contract or plan, on a monthly basis in advance as such premium becomes due during this coverage period. Such premium payment must include any portion of the premium paid by a former employer or other person if such employer or other person no longer contributes premium payments for this coverage. At the end of such period, the group member shall have the same conversion rights that were available on the date of termination of coverage in accordance with the conversion privileges contained in the group contract or group plan.

(d)(1) A group member shall not be entitled to have coverage continued if: (A) termination of coverage occurred because the employment of the group member was terminated for cause; (B) termination of coverage occurred because the group member failed to pay any required contribution; or (C) any discontinued group coverage is immediately replaced by similar group coverage including coverage under a health benefits plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq. Further, a group member shall not be entitled to have coverage continued if the group contract or group plan was terminated in its entirety or was terminated with respect to a class to which the group member belonged. This subsection shall not affect conversion rights available to a qualifying eligible individual under any contract or plan.

(2) A qualifying eligible individual shall not be entitled to have coverage continued if the most recent creditable coverage within the coverage period was terminated based on one of the following factors: (A) failure of the qualifying eligible individual to pay premiums or contributions in accordance with the terms of the health insurance coverage or failure of the issuer to receive timely premium payments; (B) the qualifying eligible individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of coverage; or (C) any discontinued group coverage is immediately replaced by similar group coverage including coverage under a health benefits plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq. This subsection shall not affect conversion rights available to a group member under any contract or plan.

(e) If the group contract or group plan terminates while any group member or qualifying eligible individual is covered or whose coverage is being continued, the group administrator, as prescribed by the insurer, must notify each such group member or qualifying eligible individual that he or she must exercise his or her conversion rights within:

(1) Thirty days of such notice for group members who are not qualifying eligible individuals; or

(2) Sixty-three days of such notice for qualifying eligible individuals.

(f) Every group contract or group plan, other than a group accident and sickness insurance policy, contract, or plan issued in connection with an extension of credit, which provides hospital, surgical, or major medical expense insurance, or any combination of these coverages, on an expense incurred or service basis, excluding policies which provide benefits for specific diseases or for accidental injuries only, shall contain a conversion privilege provision.

(g) Eligibility for the converted policies or contracts shall be as follows:

(1) Any qualifying eligible individual whose insurance and its corresponding eligibility under the group policy, including any continuation available, elected, and exhausted under this Code section or the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), has been terminated for any reason, including failure of the employer to pay premiums to the insurer, other than fraud or failure of the qualifying eligible individual to pay a required premium contribution to the employer or, if so required, to the insurer directly and who has at least 18 months of creditable coverage immediately prior to termination shall be entitled, without evidence of insurability, to convert to individual or group based coverage covering such qualifying eligible individual and any eligible dependents who were covered under the qualifying eligible individual´s coverage under the group contract or group plan. Such conversion coverage must be, at the option of the individual, retroactive to the date of termination of the group coverage or the date on which continuation or COBRA coverage ended, whichever is later. The insurer must offer qualifying eligible individuals at least two distinct conversion options from which to choose. One such choice of coverage shall be comparable to comprehensive health insurance coverage offered in the individual market in this state or comparable to a standard option of coverage available under the group or individual health insurance laws of this state. The other choice may be more limited in nature but must also qualify as creditable coverage. Each coverage shall be filed, together with applicable rates, for approval by the Commissioner. Such choices shall be known as the ‘Enhanced Conversion Options’;

(2) Premiums for the enhanced conversion options for all qualifying eligible individuals shall be determined in accordance with the following provisions:

(A) Solely for purposes of this subsection, the claims experience produced by all groups covered under comprehensive major medical or hospitalization accident and sickness insurance for each insurer shall be fully pooled to determine the group pool rate. Except to the extent that the claims experience of an individual group affects the overall experience of the group pool, the claims experience produced by any individual group of each insurer shall not be used in any manner for enhanced conversion policy rating purposes;

(B) Each insurer´s group pool shall consist of each insurer´s total claims experience produced by all groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group insurance from which the qualifying eligible individual is converting. The pool shall include the experience generated under any medical expense insurance coverage offered under separate group contracts and contracts issued to trusts, multiple employer trusts, or association groups or trusts, including trusts or arrangements providing group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, through contracts issued or issued for delivery in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement; and any other group-type coverage which is determined to be a group shall also be included in the pool for enhanced conversion policy rating purposes; and

(C) Any other factors deemed relevant by the Commissioner may be considered in determination of each enhanced conversion policy pool rate so long as it does not have the effect of lessening the risk-spreading characteristic of the pooling requirement. Duration since issue and tier factors may not be considered in conversion policy rating. Notwithstanding subparagraph (A) of this paragraph, the total premium calculated for all enhanced conversion policies may deviate from the group pool rate by not more than plus or minus 50 percent based upon the experience generated under the pool of enhanced conversion policies so long as rates do not deviate for similarly situated individuals covered through the pool of enhanced conversion policies;

(3) Any group member who is not a qualifying eligible individual and whose insurance under the group policy has been terminated for any reason, including failure of the employer to pay premiums to the insurer, other than eligibility for medicare (reaching a limiting age for coverage under the group policy) or failure of the group member to pay a required premium contribution, and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits which it replaces, for at least six months immediately prior to termination shall be entitled, without evidence of insurability, to convert to individual or group coverage covering such group member and any eligible dependents who were covered under the group member´s coverage under the group contract or group plan. Such conversion coverage must be, at the option of the individual, retroactive to the date of termination of the group coverage or the date on which continuation or COBRA coverage ended, whichever is later. The premium of the basic converted policy shall be determined in accordance with the insurer´s table of premium rates applicable to the age and classification of risks of each person to be covered under that policy and to the type and amount of coverage provided. This form of conversion coverage shall be known as the ‘Basic Conversion Option’; and

(4) Nothing in this Code section shall be construed to prevent an insurer from offering additional options to qualifying eligible individuals or group members.

(h) Each group certificate issued to each group member or qualifying eligible individual, in addition to setting forth any conversion rights, shall set forth the continuation right in a separate provision bearing its own caption. The provisions shall clearly set forth a full description of the continuation and conversion rights available, including all requirements, limitations, and exceptions, the premium required, and the time of payment of all premiums due during the period of continuation or conversion.

(i) This Code section shall not apply to limited benefit insurance policies. For the purposes of this Code section, the term ‘limited benefit insurance’ means accident and sickness insurance designed, advertised, and marketed to supplement major medical insurance. The term limited benefit insurance includes accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, and comprehensive major medical insurance coverage.

(j) The Commissioner shall adopt such rules and regulations as he or she deems necessary for the administration of this Code section. Such rules and regulations may prescribe various conversion plans, including minimum conversion standards and minimum benefits, but not requiring benefits in excess of those provided under the group contract or group plan from which conversion is made, scope of coverage, preexisting limitations, optional coverages, reductions, notices to covered persons, and such other requirements as the Commissioner deems necessary for the protection of the citizens of this state.

(k) This Code section shall apply to all group plans and group contracts delivered or issued for delivery in this state on or after July 1, 1998, and to group plans and group contracts then in effect on the first anniversary date occurring on or after July 1, 1998.

33-24-21.2.

(a) As used in this Code section, the term:

(1) ‘Group contract or group plan’ is synonymous with the term ‘contract or plan’ and means:

(A) A group contract of the type issued by a nonprofit medical service corporation established under Chapter 18 of this title;

(B) A group contract of the type issued by a nonprofit hospital service corporation established under Chapter 19 of this title;

(C) A group contract of the type issued by a health care plan established under Chapter 20 of this title;

(D) A group contract of the type issued by a health maintenance organization established under Chapter 21 of this title; or

(E) A group accident and sickness insurance policy or contract, as defined in Chapter 30 of this title.

(2) ‘Group member’ means a person who has been a member of the group for at least six months; who is entitled to medical benefits coverage under a group contract or group plan; and who is an insured, certificate holder, or subscriber under the contract or plan.

(3) ‘Insurer’ means an insurance company, nonprofit hospital service corporation, medical service nonprofit corporation, health care plan, or health maintenance organization.

(4) ‘Internal Revenue Code’ means the federal Internal Revenue Code as defined in Code Section 48-1-2.

(5) ‘Plan administrator’ means:

(A) The person designated as the plan administrator by the instrument under which the group contract or plan is operated; or

(B) If no plan administrator is designated, the plan sponsor.

(b)(1) A group contract or plan providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases, which is issued, delivered, issued for delivery, or renewed in this state to provide coverage for the employees of an employer subject to the provisions of Section 4980B of the Internal Revenue Code, shall contain a provision that a group member whose insurance under the contract or plan otherwise terminates after the expiration of the period of continuation of coverage for which the individual is eligible under Code Section 33-24-21.1 or Section 4980B of the Internal Revenue Code shall be entitled to continue coverage under that group contract or plan for himself or herself and his or her eligible dependents if the group member was 60 years of age or older as of the date on which the continuation of coverage afforded under Code Section 33-24-21.1 or Section 4980B of the Internal Revenue Code commences.

(2) A group member shall not be entitled to have coverage continued under paragraph (1) of this subsection if:

(A) Termination of employment is voluntary for other than health reasons;

(B) Termination of coverage occurred because the employment of a group member was terminated for reasons which would cause a forfeiture of unemployment compensation under Chapter 8 of Title 34, the ‘Employment Security Law’;

(C) Termination of coverage occurred because the group member failed to pay any required contribution;

(D) Any discontinued coverage is immediately replaced by similar group coverage; or

(E) The group contract or group plan was terminated in its entirety or was terminated with respect to a class to which the group member belonged.

This paragraph shall not affect conversion rights available to a group member under any contract or plan.

(c) A group contract or plan providing coverage for hospital or medical expenses, other than coverage limited to expenses from accidents or specific diseases which is issued, delivered, issued for delivery, or renewed in this state to provide coverage for the employees of an employer subject to the provisions of Section 4980B of the federal Internal Revenue Code, shall contain a provision that:

(1) The surviving spouse of a group member may continue coverage under the plan, at the death of the group member, with respect to the spouse and any dependent children whose coverage under the plan otherwise would terminate because of the death of the group member if the surviving spouse is 60 years of age or older at the time of the death; and

(2) The divorced spouse of a group member may continue coverage under the plan, upon dissolution of marriage with the group member, with respect to the divorced spouse and any dependent children whose coverage under the plan otherwise would terminate because of the dissolution of marriage, if the divorced spouse is 60 years of age or older at the time of the dissolution or legal separation.

(d) Each group certificate issued to each group member shall set forth the continuation right provided in subsections (b) and (c) of this Code section in a separate provision bearing its own caption. The provision shall clearly set forth a full description or the continuation right available, including all requirements, limitations, exceptions, the premium required or a brief statement concerning the method of calculation thereof, and the time of payment of all premiums due during the period of continuation.

(e) In the event and to the extent that this Code section is applicable, the election by the group member or divorced or surviving spouse to obtain continuation of coverage as provided under the provisions of Section 4980B of the Internal Revenue Code or under the provisions of Code Section 33-24-21.1 shall constitute election of continuation of coverage under this Code section without further action by the group member or surviving or divorced spouse. The provisions of Section 4980B of the Internal Revenue Code or of Code Section 33-24-21.1, whichever is applicable, regarding notice to a group member or a divorced or surviving spouse of the right to continue coverage shall apply to the continuation of coverage provided under this Code section.

(f) If an eligible group member or the divorced or surviving spouse elects continuation of coverage under subsection (b) or (c) of this Code section:

(1) The monthly premium for the continuation shall not be greater than 120 percent of the total of the amount that would be charged if the eligible group member or the divorced or surviving spouse were a current group member and the amount that the group policyholder would contribute toward the premium if the eligible group member or the divorced or surviving spouse were a current group member;

(2) The first premium for the continuation of coverage under this Code section shall be paid by the eligible group member or the divorced or surviving spouse on the first regular due date following the expiration of the eligible person´s benefits under the provisions of Code Section 33-24-21.1 or Section 4980B of the Internal Revenue Code; and

(3) The right to continuation of coverage shall terminate upon the earliest of any of the following:

(A) The failure to pay premiums or required premium contributions, if applicable, when due, including any grace period allowed by the policy;

(B) The date that the group plan is terminated as to all group members, except that if a different group plan is made available to group members, the eligible group member or the divorced or surviving spouse shall be eligible for continuation of the same coverage under the new plan;

(C) The date on which the eligible group member or divorced or surviving spouse becomes insured under any other group health plan; or

(D) The date on which the eligible group member or the divorced or surviving spouse becomes eligible for federal medicare coverage.

(g) This Code section shall apply to any group contract or group plan which covers 20 or more employees and which is issued, delivered, issued for delivery, or renewed in this state on or after July 1, 1992, and to any group contract or group plan covering 20 or more employees then in effect on the first anniversary date occurring on or after July 1, 1992.

All copyrights and other rights to statutory text are reserved by the State of Georgia.

Georgia’s Mini-Cobra law can be found in the Official Code of Georgia Annotated, Title 33, Chapter 24, Sections 33-24-21.1 and 33-24-21.2 (0n the left).

Loss of coverage

Health insurance group policies must allow members to continue coverage for the remainder of the month plus additional three months.

Eligible group members are considered those individuals who have been covered by the policy for at least 6 months prior to insurance termination.

Employees receive the privilege of continuation of coverage unless of the following reasons:

• discharged for misconduct
• neglect to pay premiums
• termination of employer’s plan or plan replacement.

Continuation Coverage for Individuals over 60

• Group policies must allow members who are age 60 and older to extend their coverage.
• Members are ineligible if group coverage terminated entirely or if employee voluntarily terminated employment (except for health reasons)
• Did not pay premiums
• Obtained similar coverage elsewhere.

• Spouses age 60 and older whose coverage would terminate due to employee’s death, divorce or legal separation can elect extended coverage. Likewise spouses can continue the coverage for dependents as well.

• When members over 60 years old elect COBRA, this election is considered an election of the extension.

• An employer reserves the right to end this extension early if premiums are not paid, or if the plan is terminated for all plan members, covered individual obtains another insurance coverage, or becomes eligible for Medicare.

Conversion Rights

Group members are entitled to full conversion rights that would have been available at the date of coverage termination. All insurance carriers should allow surviving spouses and divorced spouses of group members to covert their coverage without evidence of insurability to a similar individual policy.

Premium Payments

Georgia’s Cobra law requires that individuals pay no more than 100% of premium during the three-month coverage period. During extension of coverage, employers can charge up to 120% of the premium.

Additional Differences From the federal COBRA statute

• Employer must notify covered individuals of the right to elect extension for members over 60 years old.
• Members on extension become eligible for Medicare at age 65, therefore these members can switch to Medicare policies.
• Dependents do not have independent election rights under Georgian law, whereas they can elect COBRA independently.