—Background—
New Jersey law(1) requires that small employers (1-50 employees) provide expanded continuation of healthcare benefits for persons who lost eligibility under an employer’s health plan. New Jersey’s continuation coverage law generally applies to employers who employ fewer than 20 employees.
Employers with 20 or more employees are covered by the federal COBRA law. Employers with 20-50 eligible employees are covered by both COBRA and New Jersey’s group continuation requirements.
—Employee Eligibility for Continuation—
Any employee is eligible to receive continuing coverage as long as employment is terminated for a reason “other than for cause” or because their hours of employment were reduced to less than 25 per week.
Spouses and dependent children are also eligible for coverage. In the event of an employee’s death or divorce, his/her spouse and dependent children can continue coverage under the employer’s health plan.
These situations are referred to as “qualifying events.”
—Time Limits—
An employee is entitled to a continuation period under their employer’s health benefits plan for up to 18 months. A spouse or dependent children are eligible for up to 36 months in the event of the death of the employee or divorce. An employee disabled under the Social Security Act is eligible to continue coverage for up to 29 months.
Eligible participants can receive coverage until: the employer stops providing a health benefits plan; the employee fails to make timely premium payments; the participant becomes covered under another health plan; or the beneficiary becomes eligible for Medicare.
—Frequently Asked Questions—
How much can the former employer charge the qualified beneficiary for coverage?
The beneficiary can be required to pay the premium, but it may not exceed 102 percent of the applicable premium (or 150 percent for a disabled beneficiary). Premium payments should be made within 30 days after the due date, or within a longer period if provided by the policy.
What are the responsibilities of the former employee?
Former employees that choose State continuation of coverage must notify employers in writing within 30 days of termination or within 30 days of assuming part-time status.
What type of benefits must be offered under State continuation of coverage?
The coverage must be identical to that provided to “similarly situated qualified beneficiaries.” In other words, if an employer’s plan is altered for any group of beneficiaries, the continuation coverage must be modified in the same manner.
What if the cost of the premium goes up during the time of coverage?
Employers may ask qualified beneficiaries to pay an increased cost, but the rate must be established before each 12-month cycle.
When does coverage begin?
State continuation of coverage begins on the date that the benefits would have otherwise been lost due to termination of employment or the date when part-time hours begin.
What are employers’ responsibilities under the State continuation of coverage requirement? Employers are required to notify qualified beneficiaries of their right to continue coverage at the time of termination of employment or when an employee’s hours are reduced to part-time status.
—For More Information—
More detailed information about New Jersey’s continuation of coverage law issued by the Small Employer Health Benefits Program is available by visiting http://www.nj.gov/dobi/division_insurance/ihcseh/sehguide2016/continuation.html.
You can also email ellen.derosa@dobi.state.nj.us or call 609-633-1882, ext. 50302.
For more information on the Federal COBRA law, the U.S. Department of Labor has an employer’s guide available by visiting http://www.dol.gov/ebsa/pdf/cobraemployee.pdf.
If you need additional information, please contact Chrissy Buteas at cbuteas@njbia.org or 609-858-9510.
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(1) Effective January 1, 1994, and as amended effective March 7, 2005 (P.L. 2004, ch.162).
Updated: October 18, 2016
This information should not be construed as constituting specific legal advice. It is intended to provide general information about this subject and general compliance strategies. For specific legal advice, NJBIA strongly recommends members consult with their attorneys.
16 responses to “New Jersey Continuation of Coverage for Healthcare”
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can you purchase medical insurance without cobra.eventually looking to retire and will not have medical.is this possible
thanks for sharing information, really helped me.
You’re welcome – glad to help.
Hello Marie,
In order to make sure I understand your question correctly, I’m going to contact you directly.
Hello Mary, I was let go from my job on February 2, 2018. I called my former employer and asked if I could go on cobra and he said no it wasn’t available.Does this law apply still to this day?
For Susan S.
Both COBRA – for employers with more than 20 employees and NJ Continuation (employers in NJ with 2-50 employees) exist inforce today. You mention COBRA – so if your employer has less than 20 employees, you technically received the correct answer. If your employer has fewer than 20 employee AND is fully insured, you should be eligible for NJ State Continuation. Ask again about NJ State continuation.
My position was also terminated with no offering of Cobra. Wondering what were the best options you were able to come by?
Is there a general notice for groups under 20?
My employer did not renew my families health insurance but mine is still active. I have a wife and two kids now with no insurance. I have tried to get this rectified from my hr dept but it’s been five months already. How can I file a complaint against my company here in Nj?
What legal options do we have if our former employer never notified us of continued coverage after termination? My insurance was terminated the day I was let go. Less than 20 employees in the NJ office but there are over 130 globally – does that factor in as well.
Where do I look to see if I can obtain continuation coverage other than COBRA through former employer that might cost less than COBRA? My former employer is in extreme financial difficulty, hasn’t paid me wages due and I am afraid to trust them with my COBRA on their plan. Thank you.
I was just diagnosed with cancer. I will have surgery in a couple of weeks. Doctor says I will have to go on disability for 6 weeks. I work for a small company, only 5 employees but they have been paying my health insurance. I have asked them if they will still pay for it while I recuperate and they have not given me an answer. What should I do?
I was just diagnosed with cancer. I will have surgery in a couple of weeks. Doctor says I will have to go on disability for 6 weeks. I work for a small company, only 7 employees but they have been paying my health insurance. I have asked them if they will still pay for it while I recuperate and they have not given me an answer. What should I do?
If I have to quit work due to health issues, can I receive Cobra or continuing health coverage while I apply for Social Security disability benefit and get Medicare?
Can a dependent child get 36 months Cobra if the parent voluntary terminates to gte a medicare and supplemental insurance. I am not see this listed as a Life Event?
Thank you,
After Almost 10 years at my former employment, I received a better job offer and accepted the offer. I asked my then employer about cobra, and that I would need coverage till my new insurance kicked in. After some discussions, My employer said I would have to make payments to him by the 8th of every month.
Today, I recieved a text from him saying that I would have to give the payment for next month “NOW” instead of the 8th of July. When I told him I could give him the money by Wednesday the 3rd of july, he told me f!*÷ you. He was ” trying to help me and that he didnt even have to offer me cobra, and that he could tell me to find health insurance somewhere else”
Long story short I told him I would get the money to him by Wednesday the 3rd of July and was hung up on!
What are my options?