Photo credit: Melanie Dretvic on Unsplash

Blog by: Michael Sheeran, CFP

If you have recently lost your health insurance coverage because you were laid-off, furloughed, reduced hours, or have quit, you have the option to continue your coverage via NJ Continuation or COBRA.

If the company you worked for had less than 20 employees for more than 50% of year in the previous calendar year, than you are eligible for NJ Continuation rather than COBRA.

Qualifying for NJ Continuation – a list of qualifying events

• You must be terminated for a reason “other than for cause”
• Your hours have been reduced to less than 25 per week, making you part-time.
• Death of the employee – dependents may continue
• Dependent child ages off plan – older than 26

Who is eligible to continue coverage?

Typically, anyone who was covered by the plan prior to the loss of coverage including all dependents.

How long may you continue your coverage?

• Normal Termination: Up to 18 months
• For death of primary cardholder: Dependents may continue up to 36 months.
• Divorce: Spouses that lose coverage through a divorce may continue up to 36 months.
• Disability: Employees deemed disabled under the Social Security Act may continue up to 29 months.

Cost

Employees are responsible for 100% of the premium and employers may charge an additional 2% administrative fee. For disabled employees, employers may charge up to 150% of the premium.

When enrolling, the employee has up to 30 days to make first premium payment after notifying the employer they would like to continue the coverage.

When does the coverage end?

There are a few ways the coverage can end.

1. Employer terminates all the health plans offered.
2. Continuing subscriber requests termination
3. Subscriber fails to make timely premium payment
4. Subscriber exhausts the time allotted to continue (18, 29 or 36 mos.)

Notes For Employers

• You must notify employees of their right to continue coverage, but are not required to notify dependents (different than COBRA).
• The employer can’t require the first premium payment must be made immediately. Your former employee has up to 30 days to make first payment, and once they do, you turn their coverage back on retroactively to the last day of coverage.

Notes for Employees

• You must notify your prior employer you would like to continue coverage within 30 days of receiving your continuation paperwork.
• You must make your first premium payment within 30 days of notifying that you will be continuing coverage.
• Each month you must make a timely payment and not exceed your 30 day grace period payment window.
• Premium payments should be made directly to the employer and not to the carrier.
• VERY IMPORTANT****** Once you enroll in continuation, you are no longer eligible to enroll in an individual health plan except during open enrollment (November 1 – December 15), or when your continuation coverage expires.
• Your spouse is not entitled to continuation if you are disenrolling due to Medicare. This is not a qualifying event under NJ Continuation. It is for COBRA though.

Additional Resources

If you have any questions regarding NJ Continuation please email me at msheeran@glenninsurance.com. Some situations that come up can be very complex, and hard to cover in a blog post. You can also read more in the resources below.

Additional information from the State DOBI can be found here and here under the NJ DOBI SEH Buyers Guide.