Most people are at least a little bit familiar with what COBRA Continuation Coverage is and how it works. But did you know that COBRA requirements only apply to those employers that have 20 or more employees? So what about smaller employers (20 or fewer employees)?
What is Iowa Continuation Coverage
The State of Iowa has a law that requires employers with less than 20 employees that provides coverage under a group health policy to offer continuation coverage. Iowa Continuation provides continuation coverage to those employees whose coverage would otherwise end because of termination of employment. The law also provides coverage for covered spouses and/or covered dependent children of employees.
Iowa Continuation Coverage Eligibility
To be eligible for IA Continuation, an employee must have been covered under the group policy continuously for the 3 month period immediately preceding the termination. There is also eligibility for spouses and or dependents due to divorce/legal separation or employee death.
Employees are NOT eligible for Iowa Continuation if there was a break in coverage during the last 3 months OR they have been covered for less than 3 months. The employee would also be ineligible if they are or could be covered by Medicare or another group health policy.
How Iowa Continuation Coverage Works
If you are an employer, you must write a notice within 10 days after termination to let the employee know they have the right to continue coverage. Employees that wish to elect IA Continuation must request enrollment IN WRITING within 10 days of the date of termination or the date they were provided the notice, whichever is later.
The cost of Iowa Continuation is 100% of the full employee premium. An employer cannot charge an administration fee as COBRA allows. Like COBRA, the employee is responsible for paying the employer directly for IA Continuation coverage. Carriers will not accept payments directly from the employee. When it comes to premium, the employer is ultimately the one that picks the payment due date.
Iowa Continuation has a maximum length of 9 months, there are no options for extension. This form of coverage can be terminated for the following reasons: premium is not paid on time, an enrollee becomes Medicare eligible, an enrollee becomes eligible for another group health plan, if an enrollee is a former spouse and remarries, or the group discontinues the health plan.
Jamie Braman, our health insurance agent, wrote this blog because she constantly gets the question “How does Iowa Continuation Coverage work again?” If you read this post and you still have questions, please reach out. Insurance can be confusing, but we can take care of everything for you. Jamie would love to answer any of your questions. Please email her at email@example.com.