LA. Continuation vs. COBRA Continuation Coverage

 

The number of employees determines which column applies

 

FEATURE

LOUISIANA CONTINUATION < 20

FEDERAL COBRA  20+

 

Notice to Employees

Employer has no obligation to notify a terminating employee continuation coverage rights, although a notice of the continuation privilege must be included in the certificate of coverage and the group policyholder must make available the forms on which employees may elect coverage.

Employer is required to mail the terminated employee a COBRA election notice within 44 days of a qualifying event (assuming the employer is the plan administrator). Also must notify participants of COBRA rights upon enrollment in plan.

 

Eligibility

Employee must have been continuously insured under the group policy for at least three consecutive months prior to termination, Eligibility for other coverage within 31 days after termination precludes continuation eligibility.

Employee is eligible for COBRA after one day of coverage on the employer’s group health plan. Eligibility for other coverage is irrelevant.

 

Qualifying Events

Per Department of Insurance, only one qualifying event: the termination of the employee,

Several qualifying events, including:
termination, reduction in hours, death of employee, divorce, entitlement to Medicare, and a dependent child ceasing to be a dependent.

 

Election

Employee must request continuation in writing by the time of termination of employment,

Qualified beneficiary may elect COBRA up to 60 days from the later of the date notice was provided or the date coverage would otherwise end.

 

Premium Payment

Premium due at the time of election (by last day of employment) and thereafter on the date designated by the employer. No grace period for late payments (coverage can be immediately terminated). Employee must pay 100% of the premium group rate applicable to the employee’s Coverage.

Qualified Beneficiaries have 45 days after electing COBRA to make their first premium payment and have a 30-day grace period for subsequent premium payments. Total premium may be up to 102% of premium applicable to the employee’s coverage.

Qualified  Beneficiaries Who May Elect   Coverage 
 

The entire family unit as it existed prior to termination must be placed on continuation of  coverage Any dependent on the group health plan may elect COBRA following a qualifying event.

Duration of  Coverage

Up to 12 months or until the employer terminates the health plan or changes to another insurer; or until the employee moves outside the HMO service area, makes his last required contribution, or becomes eligible for “similar benefits” under another group health plan (earliest of the above).

 

18 months for termination of employment or reduction of hours; 29 months if disabled; 36 months for death, Medicare entitlement, divorce, or ceasing to be a dependent.

Penalties

No penalty provisions. The continuation requirement is in the LA Insurance Code, but the Dept of Insurance has no jurisdiction over employers and has no basis to sanction an employer that does not provide continuation coverage. ERISA allows courts to impose penalties if an employer fails to comply with COBRA (up to $110 per day). Penalties are within the discretion of the court.

{N1239199.I }

 

 

 

 

 

January 15, 2005

Author  Tim Brechtel

Of Jones Walker, LLF


tbrechtel@joneswalker.com

(504) 582-8236
The information above is believed to be true but is not guaranteed.