What is continuation?
Continuation refers to a continuation of coverage of employer health coverage when you leave a job. Continuation of coverage is usually stipulated under COBRA, or the Consolidated Omnibus Budget Reconciliation Act.
When you leave a job, companies that employ 20 or more employees are required by federal law to keep you and your qualifying dependents on the company’s group health care plan for a period of 18 to 36 months, depending on circumstances. A stipulation of this continuation of coverage is that you must pay the premiums for the health insurance.
Usually, when using COBRA for a continuation of coverage, you have to pay the part of the premium that your company had to pay while you worked for them.
While a company could theoretically continue to pay the premiums as before, they are not required by law to do so. In most cases, companies elect to forego paying health insurance premiums for former employees and their families.
If you lose your job due to termination or suffer a reduction in work hours that causes you to lose your medical coverage, employers are required to offer you COBRA for at least 18 months. This includes your spouse and any children you have.
If you become eligible for Medicare or die, your spouse and children can continue their coverage under COBRA for 36 months. This is also the case in a divorce or legal separation or if any of your children lose their dependent status.
Upon losing your job, you receive a letter from your employer that you, your spouse and your dependent children qualify for a continuation of coverage under COBRA.
The letter also should tell you the length of time you can elect to continue your health insurance coverage under COBRA and how much you can expect to pay. You then have 60 days from receiving the COBRA election notice to continue coverage.