COBRA Law Summaries

COBRA Law Summaries

Utah, COBRA Law Summaries

Utah's health care continuation law is located in the Utah Code Annotated at Title 31A, Ch. 22.

WHAT THE EMPLOYER MUST DO

Utah mini-COBRA benefits for employer group coverage.- An insured has the right to extend the employee's coverage under the current employer's group policy for a period of 12 months (formerly six), except as provided in Sec. 31A-22-722(2) below. The right to extend coverage includes (Sec. 31A-22-722(1), as last amended by H.188, L. 2009, effective March 11, 2009):

1. voluntary termination;

2. involuntary termination;

3. retirement;

4. death;

5. divorce or legal separation;

6. loss of dependent status;

7. sabbatical;

8. any disability;

9. leave of absence; or

10. reduction of hours.

Extended election period. Individuals otherwise eligible for the new federal premium subsidy provided by the American Recovery and Reinvestment Act of 2009 have an extended period in which to elect coverage under Utah’s law. Eligible individuals have until April 18, 2009, to contact the employer or insurer about participating in the second election period. Forms for coverage must then be submitted by the individual to the insurer prior to May 1, 2009. Eligible individuals are those who were (1) involuntarily terminated between September 1, 2008 and February 17, 2009; (2) eligible for COBRA premium assistance under ARRA; and (3) eligible for Utah mini-COBRA at the time of termination (Sec. 31A-22-722.5, as added by H.178, enacted and effective March 25, 2009).

An employee does not have the right to extend coverage under the current employer's group policy if the employee (Sec. 31A-22-722(2)(a), as amended by H.188, L. 2009, effective March 11, 2009):

1. failed to pay any required individual contribution;

2. acquires other group coverage covering all preexisting conditions, including maternity, if the coverage exists;

3. performed an act or practice that constitutes fraud in connection with the coverage;

4. made an intentional misrepresentation of material fact under the terms of the coverage;

5. was terminated for gross misconduct;

6. has not been continuously covered under the current employer's group policy for a period of three months (formerly six) immediately prior to the termination of the policy due to the events set forth in Sec. 31A-22-722(1) above;

7. is eligible for any extension of coverage required by federal law; or

8. elected alternative coverage under Section 31A-22-724 (below).

The right to extend coverage under Sec. 31A-22-722(1) above applies to any spouse or dependent coverages, including a surviving spouse or dependents whose coverage under the policy terminates by reason of the death of the employee or member (Sec. 31A-22-722(2)(b), as added by Ch. 108 (H. 207), L. 2004).

The employer shall provide written notification of the right to extend group coverage and the payment amounts required for extension of coverage, including the manner, place, and time in which the payments shall be made to (Sec. 31A-22-722(3)(a), as added by Ch. 108 (H. 207), L. 2004):

1. the terminated insured;

2. the ex-spouse; or

3. if Sec. 31A-22-722(2)(b) above applies: (a) to a surviving spouse; and (b) the guardian of surviving dependents, if different from a surviving spouse.

The notification shall be sent first class mail within 30 days after the termination date of the group coverage to (Sec. 31A-22-722(3)(b), as added by Ch. 108 (H. 207), L. 2004):

1. the terminated insured's home address as shown on the records of the employer;

2. the address of the surviving spouse, if different from the insured's address and if shown on the records of the employer;

3. the guardian of any dependents address, if different from the insured's address, and if shown on the records of the employer; and

4. the address of the ex-spouse, if shown on the records of the employer.

The insurer shall provide the employee, spouse, or any eligible dependent the opportunity to extend the group coverage at the payment amount stated in this subsection (3) if (Sec. 31A-22-722(4), as added by Ch. 108 (H. 207), L. 2004):

1. the employer policyholder does not provide the terminated insured the written notification required by Sec. 31A-22-722(3)(a) above; and

2. the employee or other individual eligible for extension contacts the insurer within 60 days of coverage termination.

The premium amount for extended group coverage may not exceed 102% of the group rate in effect for a group member, including an employer's contribution, if any, for a group insurance policy (Sec. 31A-22-722(5), as added by Ch. 108 (H. 207), L. 2004).

Except as provided in this subsection, the coverage extends without interruption for 12 months (formerly six) and may not terminate if the terminated insured or, with respect to a minor, the parent or guardian of the terminated insured (Sec. 31A-22-722(6), as amended by H. 188, L. 2009, effective March 11, 2009):

1. elects to extend group coverage within 60 days of losing group coverage; and

2. tenders the amount required to the employer or insurer.

The insured's coverage may be terminated prior to 12 months (formerly six) if the terminated insured (Sec. 31A-22-722(7), as amended by H.188, L. 2009, effective March 11, 2009):

1. establishes residence outside of this state;

2. moves out of the insurer's service area;

3. fails to pay premiums or contributions in accordance with the terms of the policy, including any timeliness requirements;

4. performs an act or practice that constitutes fraud in connection with the coverage;

5. makes an intentional misrepresentation of material fact under the terms of the coverage;

6. becomes eligible for similar coverage under another group policy; or

7. employer's coverage is terminated, except as provided in Sec. 31A-22-722(8) below.

If the current employer coverage is terminated and the employer replaces coverage with similar coverage under another group policy, without interruption, the terminated insured, spouse, or the surviving spouse and guardian of dependents if Sec. 31A-22-722(2)(b) above applies, have the right to obtain extension of coverage under the replacement group policy (Sec. 31A-22-722(8), as amended by Ch. 188 (H. 156), L. 2006):

1. for the balance of the period the terminated insured would have extended coverage under the replaced group policy; and

2. if the terminated insured is otherwise eligible for extension of coverage.

Within 30 days of the insured's exhaustion of extension of coverage, the employer shall provide the terminated insured and the ex-spouse, or, in the case of the death of the insured, the surviving spouse, or guardian of any dependents, written notification of the right to an individual conversion policy under Section 31A-22-723 (Sec. 31A-22-722(9)(a), as amended by H. 188, L. 2009, effective March 11, 2009).

The notification required by Sec. 31A-22-722(9)(a) above (Sec. 31A-22-722(9)(b), as added by Ch. 108 (H. 207), L. 2004):

1. shall be sent first class mail to: (a) the insured's last-known address as shown on the records of the employer; (b) the address of the surviving spouse, if different from the insured's address, and if shown on the records of the employer; (c) the guardian of any dependent's last known address as shown on the records of the employer, if different from the address of the surviving spouse; and (d) the address of the ex-spouse as shown on the records of the employer, if applicable; and

2. shall contain the name, address, and telephone number of the insurer that will provide the conversion coverage.

Conversion to individual policy.- Notwithstanding Sec. 31A-1-103(3)(f), and except as provided in Sec. 31A-22-723(3) below, all policies of accident and health insurance offered on a group basis under this title, or Title 49, Ch. 20, Public Employees' Benefit and Insurance Program Act, shall provide that a person whose insurance under the group policy has been terminated is entitled to choose a converted individual policy in accordance with this section and Section 31A-22-724. (Sec. 31A-22-723(1), as amended by H. 188), L. 2009, effective March 11, 2009).

A person who has lost group coverage may elect conversion coverage with the insurer that provided prior group coverage if the person (Sec. 31A-22-723(2), as amended by H. 188, L. 2009, effective March 11, 2009):

1. has been continuously covered for a period of three months (previously six) by the group policy or the group's preceding policies immediately prior to termination;

2. has exhausted either (i) Utah mini-COBRA coverage as required in Sec. 31A-22-722 (above), (ii) federal COBRA coverage; or (iii) alternative coverage under Section 31A-22-724;

3. has not acquired or is not covered under any other group coverage that covers all preexisting conditions, including maternity, if the coverage exists; and

4. resides in the insurer's service area.

This section does not apply if the person's prior group coverage (Sec. 31A-22-723(3), as amended by H. 236, L. 2005, effective May 2, 2005):

1. is a stand alone policy that only provides one of the following: (a) catastrophic benefits; (b) aggregate stop loss benefits; (c) specific stop loss benefits; (d) benefits for specific diseases; (e) accidental injuries only; (f) dental; or (g) vision;

2. is an income replacement policy;

3. was terminated because the insured: (a) failed to pay any required individual contribution; (b) performed an act or practice that constitutes fraud in connection with the coverage; or (c) made intentional misrepresentation of material fact under the terms of coverage; or

4. was terminated pursuant to Sec. 31A-8-402.3(2)(a), 31A-22-721(2)(a); or 31A-30-107(2)(a).

The employer shall provide written notification of the right to an individual conversion policy within 30 days of the insured's termination of coverage to (Sec. 31A-22-723(4)(a), as amended by H. 236, L. 2005, effective May 2, 2005):

1. the terminated insured;

2. the ex-spouse; or

3. in the case of the death of the insured: (a) the surviving spouse; and (b) the guardian of any dependents, if different from a surviving spouse.

The notification required by Sec. 31A-22-723(4)(a) just above shall (Sec. 31A-22-723(4)(b), as amended by H. 236, L. 2005, effective May 2, 2005):

1. be sent by first class mail;

2. contain the name, address, and telephone number of the insurer that will provide the conversion coverage; and

3. be sent to the insured's last-known address as shown on the records of the employer of: (a) the insured; (b) the ex-spouse; and (c) if the policy terminates by reason of the death of the insured to: (i) the surviving spouse; and (ii) the guardian of any dependents, if different from a surviving spouse.

An insurer is not required to issue a converted policy that provides benefits in excess of those provided under the group policy from which conversion is made. Except as provided in the next sentence, if the conversion is made from a health benefit plan, the employee or member must be offered (i) at least the basic benefit plan as provided in Section 31A-22-613.5 through December 31, 2009; and (ii) beginning January 1, 2010, only the alternative coverage as provided in “offer of alternative coverage,” Subsection 31A-22-724 (1)(a), below. The exception is if the benefit levels required in the previous sentence exceed the benefit levels provided under the group policy, the conversion policy may offer benefits that are substantially similar to those provided under the group policy. (Sec. 31A-22-723(5), as amended by H. 188, L. 2009, effective March 11, 2009).

Written application for the converted policy shall be made and the first premium paid to the insurer no later than 60 days after termination of the group accident and health insurance (Sec. 31A-22-723(6), as added by Ch. 108 (H. 207), L. 2004).

A newly issued converted policy covers the employee or member and must also cover all dependents covered by the group policy at the date of termination of the group coverage (Sec. 31A-22-723(10), as added by Ch. 108 (H. 207), L. 2004).

Offer of alternative coverage.Alternative coverage means: (a) the high deductible or low deductible Utah NetCare Plan described in immediately below in subsection (2) for conversion policies offered under Section 31A-22-723; and (b) the high deductible and low deductible Utah NetCare Plans described in subsection (2) as an alternative to COBRA and mini-COBRA policies offered under Section 31A-22-722 (Sec 31A-22-724(1), as added by H.188, L. 2009, effective March 11, 2009).

Utah NetCare Plans. The Utah NetCare Plans shall include (Sec 31A-22-724(2), as added by H.188, L. 2009, effective March 11, 2009):

1. healthy lifestyle and wellness incentives;

2. the benefits described in this subsection or at least the actuarial equivalent of the benefits described in this subsection

3. a lifetime maximum benefit per person of not less than $1,000,000;

4. an annual maximum benefit per person of not less than $250,000;

5. the following deductibles:

1. for the low deductible plans: (A) $2,000 for an individual plan; (B) $4,000 for a two party plan; and (C) $6,000 for a family plan;

2. for the high deductible plans: (A) $4,000 for an individual plan; (B) $8,000 for a two party plan; and (C) $12,000 for a family plan;

1. the following out-of-pocket maximum costs, including deductibles, copayments, and coinsurance:

1. for the low deductible plans: (A) $5,000 for an individual plan; (B) $10,000 for a two party plan; and (C) $15,000 for a family plan; and

2. for the high deductible plan: (A) $10,000 for an individual plan; (B) $20,000 for a two party plan; and (C) $30,000 for a family plan;

1. the following benefits before applying any deductible requirements and in accordance with IRC Section 223: (i) all well child exams and immunizations up to age five, with no annual maximum; (ii) preventive care up to a $500 annual maximum; (iii) primary care and specialist and urgent care not covered under Subsection (2)(g)(i) or (ii) up to a $300 annual maximum; and (iv) supplemental accident coverage up to a $500 annual maximum;

2. the following copayments for each exam: (i) $15 for preventive care and well child exams; (ii) $25 for primary care; and (iii) $50 for urgent care and specialist care;

3. a $200 copayment for emergency room visits after applying the deductible;

4. no more than a 30% coinsurance after deductible for covered plan benefits for hospital services, maternity, laboratory work, x-rays, radiology, outpatient surgery services, injectable medications not otherwise covered under a pharmacy benefit, durable medical equipment, ambulance services, in-patient mental health services, and out-patient mental health services; and

5. the following cost-sharing features for prescription drugs: (i) up to a $15 copayment for generic drugs; (ii) up to a 50% coinsurance for name brand drugs; and (iii) may include formularies and preferred drug lists.

Utah NetCare exclusions: The Utah NetCare Plans may exclude (Sec 31A-22-724(3), as added by H.188, L. 2009, effective March 11, 2009):

1. the benefit mandates described in Subsections 31A-22-618.5 (2)(b) and (3)(b); and

2. unless required by federal law, mandated coverage required by the following: (i) Adoption indemnity benefits; (ii) Inborn metabolic errors; (iii) Primary care physicians; (iv) Coverage of diabetes; (v) Standing referral to a specialist; and (vi) Coverage mandates enacted after January 1, 2009, that are not required by federal law.

Eligibility for electing alternative coverage. Beginning January 1, 2010, and except as provided in subsection (5), a person may elect alternative coverage under this section if the person is eligible for continuation of employer group coverage under federal COBRA laws; is eligible for continuation of employer group coverage under state mini-COBRA under Section 31A-22-722; or is eligible for a conversion to an individual plan after the exhaustion of benefits under:

1. alternative coverage elected in place of federal COBRA; or

2. state mini-COBRA under Section 31A-22-722.

(Sec 31A-22-724(4), as added by H.188, L. 2009, effective March 11, 2009).

The right to extend coverage described above applies to any spouse or dependent coverages, including a surviving spouse or dependent whose coverage under the policy terminates by reason of the death of the employee or member (Sec 31A-22-724(4), as added by H.188, L. 2009, effective March 11, 2009).

If a person elects federal COBRA coverage, or state mini-COBRA coverage under Section 31A-22-722, the person is not eligible to elect alternative coverage under this section until the person is eligible to convert coverage to an individual policy under the provisions of Section 31A-22-723 and Subsection (1)(a) (Sec 31A-22-724(5), as added by H.188, L. 2009, effective March 11, 2009).

If the alternative coverage is selected as an alternative to COBRA or mini-COBRA under Section 31A-22-722, the provisions of Section 31A-22-722 apply to the alternative coverage. If the alternative coverage is selected as a conversion policy under Section 31A-22-723, the provisions of Section 31A-22-723 apply (Sec 31A-22-724(6), as added by H.188, L. 2009, effective March 11, 2009).

Model notice letter to be available November 1, 2009. An insurer subject to these provisions must, prior to September 1, 2009, file an alternative coverage policy with the department. The department must, by November 1, 2009, adopt administrative rules to develop a model letter for employers to use to notify an employee of the employee's options for alternative coverage (Sec 31A-22-724(7), as added by H.188, L. 2009, effective March 11, 2009).

Policy extension for children with a disability.- Every accident and health insurance policy or contract that provides coverage of a disabled dependent shall not terminate the policy due to an age limitation. The insurer may require proof of the incapacity and dependency be furnished by the person insured under the policy within 30 days of the effective date or the date the child attains the age specified in Sec. 31A-22-610.5(2), and at any time thereafter, except that the insurer may not require proof more often than annually after the two-year period immediately following attainment of the limiting age by a the disabled dependent. Any group accident and health insurance policy or HMO contract that provides coverage for a policyholder's or certificate holder's dependent shall, upon application, provide coverage for all unmarried disabled dependents who have been continuously covered , with no break of more than 63 days, under any accident and health insurance since the age specified in Sec. 31A-22-610.5(2) (Sec. 31A-22-611, as amended by Ch. 188 (H. 156), L. 2006).

Trade Act of 2002.- For an individual who elects federal COBRA continuation coverage during the second election period provided under the federal Trade Act of 2002, the days between the date the individual lost group health plan coverage and the first day of the second COBRA election period are not taken into account in determining whether a significant break in coverage has occurred (Sec. 31A-22-605.1, as added by H. 236, L. 2005, effective May 2, 2005).

NOTICE

See also WHAT THE EMPLOYER MUST DO above.

Every policy for group or blanket accident and health coverage issued or renewed after July 1, 1990, shall include a provision that obligates the policyholder to give 30 days' prior notice of termination to each employee or group member and to notify each employee or group member of his or her rights to continue coverage upon termination (Sec. 31A-22-716(1), as amended by Ch. 108 (H. 207), L. 2004).

An insurer's monthly notice to the policyholder of premium payments due shall include a statement of the policyholder's obligations as set forth in Sec. 31A-22-716(1) above. Insurers shall provide a sample notice to the policyholder at least once a year (Sec. 31A-22-716(2), as amended by Ch. 108 (H. 207), L. 2004).

For the purposes of compliance with federal law and the Health Insurance Portability and Accountability Act (HIPAA), all health benefit plans, health insurers, and student health plans must provide a certificate of creditable coverage to each covered person upon their termination from the plan as soon as reasonably possible (Sec. 31A-22-716(3), as amended by Ch. 108 (H. 207), L. 2004).

<p>For the purposes of compliance with federal law and the Health Insurance Portability and Accountability Act (HIPAA), all health benefit plans, health insurers, </p>

Utah, COBRA Law Summaries

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