NJ Continuation and COBRA
When must the continuation election be made?
- The continuation election must be made within 30 days after the termination of coverage eligibility.
- Unlike COBRA, the New Jersey small employer continuation statute does not impose a notice requirement upon employers. Board bulletins have encouraged employers and carriers to provide notice of the continuation right, but the SEH Board cannot enforce such an obligation against an employer.
What is considered the termination date from which to count for purposes of making an election?
- The 30-day election period starts the day following the date coverage ends. The standard small employer health benefits plans have variable text with respect to this issue: coverage may end on the same date that employment terminates, or coverage may end immediately after the expiration of the last day of the month in which employment terminated. The contract should be consulted.
When must premium payment be received?
- Payment must be received within 60 days of the election. Premium cannot be required earlier than 30 days after the election, and a grace period applies as well. If payment is made at 60 days, premium should cover two months, rather than one.
- One of the things that many employers seem not to understand is that it is incumbent upon them to establish a due date for the payments.
Is there a grace period for continuation coverage?
- There is a grace period, which runs 30 days from when premium payment is due, as specified by the employer.
- Employers should pay premium as billed by the broker and carrier, but let the broker and carrier know when a continuee is in a grace period, and notify the broker and carrier when the grace period has ended without payment received.
- If no payment is received during the grace period, termination will be retroactive to the payment due date.
- Carriers may suspend payment of claims during the grace period, but cannot apply claims against the employer’s premium. If premiums ultimately are not paid, the carrier may elect not to pay the claim, or seek to recoup claims paid against the continuee.