I'm working with a small business owner right now to setup State Continuation.
In a nutshell, you could compare it to a baby COBRA plan.
COBRA applies to companies with 20 or more employees, giving you the ability to stay on your former employer’s health plan for up to 18 months, longer in certain situations.
State Continuation, on the other hand, is for companies with fewer than 20 employees and a fully insured health plan. It gives the former employee the opportunity to continue their group health coverage for up to nine months.
If you enroll in either option, you are responsible for the full premium.
You are eligible for state continuation if:
⚕️Your fully insured health plan is terminated for any reason other than involuntary termination for cause; or
⚕️You have been insured under the group policy for at least three consecutive months immediately prior to termination.
It is important to note that State Continuation only applies to the health plan, not dental and vision or other benefits.
Once an employee is eligible, employers have 60 days to notify the insured of their rights to participate in State Continuation.
Like COBRA, there is a series of letters that need to be administered, per the Department of Labor guidelines. Employers also will need to collect the employee’s premium and handle the invoice.
Most employers don’t want/need to keep up with the additional paperwork load and utilize a third-party administrator for implementation. However, some carriers, like BCBS of Texas, will administer it for you.
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