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State and federal laws give certain employees, spouses and dependent children the right to continue employer-sponsored health benefits at group rates if they lose their benefits because of specific “qualifying events.” The type of qualifying event determines who is qualified for continued coverage and for how long.
Employers offering fully insured group and accident health plans are covered by the Illinois mini-COBRA law, regardless of the group’s size. Employers offering fully insured HMO coverage are also covered by the law. With limited exceptions, the maximum period of continuation coverage is twelve months. These twelve months begin from the date that employer provided insurance ends because of termination or a reduction of hours. Illinois mini-COBRA coverage may terminate earlier than the twelve-month period if: (i) the individual becomes eligible for Medicare; (ii) the individual becomes covered by any other insured or self-insured group medical, hospital or surgical plan; (iii) the individual fails to make timely premium payments for coverage; or (iv) the employer’s group policy is terminated in its entirety and not replaced with another group policy.
However, self-insured employers, self-insured health and welfare benefit plans (including union plans) and insurance policies written in other states are not covered by Illinois’ mini-COBRA laws.
To be eligible for continuation coverage under Illinois’ mini-COBRA laws, an individual must be continuously covered under group coverage for three months prior to termination of employment. Individuals who: are terminated for committing a work-related felony; are terminated because of workrelated theft; are covered by Medicare; or are covered by any other insured or self-insured plan, are not eligible for continuation coverage.
Employers must notify employees in writing of their rights under Illinois’ mini-COBRA law within ten days after a termination or reduction of employees’ hours. This notification must be issued in the mail or in person.
In general, an individual must request continuation in writing within the 30-day period following the later of: (i) the date of employment termination or reduction in hours; or (ii) the date written notice of the right to continuation is presented or mailed to the individual. This request must be in writing. In no event may individuals choose to participate in continuation coverage after the expiration of 60 days from the date of termination.
Employers should also be aware that Illinois also has special continuation protections for spouses and dependents. These special provisions can extend employer group accident and health policies and HMO policies for up to two years for spouses and dependents in the case of divorce, death, retirement, or when a dependent reaches a limiting age under the policy.