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Illinois Health Insurance Continuation Rights-Spousal
With the high costs of medical care, maintaining health coverage is very important to most individuals and families. Illinois law does not require employers to provide health benefits for their employees or their families. However, if you are covered by an employer's health benefits, loss of coverage can be devastating.
Medequote understands that, and that is why we are the Illinois health insurance experts for individual, family, and the self employed. We service that segment of the community and do it well. We offer short term plans from Assurant, World, Celtic, and UniCare that can be used for Cobra replacement.
State and federal laws give certain employees, spouses and dependent children the right to continue employer-sponsored health benefits at group rates if they lose their benefits because of specific "qualifying events." The type of qualifying event determines who is qualified for continued coverage and for how long.
This fact sheet provides specific information on the Illinois Spousal Continuation Law and compares its basic provisions to three other continuation laws: the Illinois Continuation Law, the Illinois Dependent Child Continuation Law and the federal continuation requirements under COBRA, the Consolidated Omnibus Budget Reconciliation Act. The chart at the bottom of this fact sheet provides a comparison of the laws pertaining to continuation of health benefits.
Under all four laws:
- The employer or plan administrator must notify you of your right to continue your health benefits when certain qualifying events have occurred. If both the state and federal laws apply to your situation, the employer or plan administrator must offer you both options. You must choose one or the other option.
NOTE: In some cases, the spouse, former spouse, dependent child or guardian must notify the employer and/or insurer that a qualifying event has occurred, such as divorce from or death of the covered employee or attainment of the limiting age by the dependent child. If you don't give proper notification, your continuation rights may be lost.
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Once you are offered continuation, you must elect to continue coverage within a certain time period, called the election period. If you don't tell the employer you want to continue coverage before the election period expires, you may lose your right to continue coverage. If you have the option of either the state or federal continuations, once you make your choice, you can't change your decision if the election period has expired.
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Coverage will continue for the maximum amount of time required by law. However, coverage may end earlier in some cases, such as when the beneficiary becomes eligible for Medicare, or if the employer no longer offers any group health insurance benefits for employees.
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You must pay the entire premium for the coverage, including the part you used to pay as well as the part the employer paid before the qualifying event. In addition, you may also be required to pay an administrative fee under certain circumstances for COBRA and Spousal Continuation.
Your group insurance certificate, evidence of coverage or benefit plan summary booklet explains your options and responsibilities in detail. You should read the information now. Don't wait until you need your continuation rights.
What Is The Illinois Spousal Continuation Law?
The Illinois Spousal Continuation Law protects a covered spouse and dependent children who lose group health insurance coverage due to death or retirement of the employee or divorce from the employee.
Which Employers Must Offer Coverage Under the Spousal Continuation Law?
Employers offering fully insured group and accident health plans, regardless of the group's size. Effective January 1, 2004, the Illinois Spousal Continuation law applies to HMO plans.
The spousal continuation law does not apply to:
- Self-insured employers;
- Health and welfare benefit plans, such as union plans;
- Insurance policies or trusts written in other states.
Who Is Eligible for Spousal Continuation Coverage?
Spousal continuation is triggered when one of the following qualifying events occurs: divorce from the employee, death of the employee or retirement of the employee. Spousal continuation then applies to:
- The divorced or widowed spouse and dependent children of the employee who were covered under the group plan on the day before the qualifying event;
- The spouse and dependent children of a retired employee, if the spouse is age 55 or older, who were covered under the group plan on the day before the qualifying event.
What Are the Notification Deadlines?
As the divorced or widowed spouse who seeks continuation, you must notify the employer and insurance company in writing of the dissolution of marriage or the death or retirement of the employee within 30 days of the qualifying event.
The employer must notify the insurance company within 15 days after receiving your request for spousal continuation. The insurance company must notify you of the right to continuation by certified mail, return receipt requested, within 30 days after receipt of the notice from the employer.
You must return the notice of continuation election form by certified mail, return receipt requested, within 30 days after the date of mailing receipt from the insurance company.
How Much Will Spousal Continuation Coverage Cost?
If you are a former spouse under age 55, the premium for Illinois Spousal Continuation coverage is the amount that would be charged if you were an employee of the employer. You are responsible for the entire premium. This amount includes any contribution that the employer would normally make on behalf of active employees.
If you are a spouse or former spouse age 55 or older, for the initial two years of Spousal Continuation coverage, the premium is the amount that would be charged if you were an employee of the employer. You are responsible for the entire premium. This amount includes any contribution the employer would normally make on behalf of active employees. After the initial two years of coverage, the premium may be adjusted to include a 20% administration fee.
What Benefits Are Available Under Spousal Continuation Coverage?
Benefits for hospital, surgical or major medical are the same as they were under the previous group coverage.
How Long Does Spousal Continuation Last?
Continuation resulting from an employee's death or divorce shall be offered for 2 years if you are under age 55 at time of election. If you are age 55 or older at the time of election, coverage will be provided until you are eligible for Medicare.
Continuation resulting from an employee's retirement is only available to spouses who are age 55 or older at the time of the retirement. Such coverage will be provided until the spouse is eligible for Medicare.
Your spousal continuation may terminate earlier than the specified time frames if:
- You fail to make timely premium payments;
- The group coverage would terminate even though you were still married to the employee (unless the employee retires during the election period);
- You become an insured employee under any other group health plan;
- You remarry.
What Happens When My Spousal Continuation Ends?
You or your dependent children can convert coverage to an individual policy at any time during the continuation period or at the end of the period, except when the continuing person becomes eligible for Medicare.
You may also want to shop around for an individual policy on your own. You may be able to find better coverage at a more affordable rate. An insurance broker in your area can assist you in applying for individual coverage.
If you or your dependent children have a medical condition that precludes the purchase of individual coverage, the HIPAA CHIP plan offered by the Illinois Comprehensive Health Insurance Plan may be an option when the continuation policy expires. You must exhaust your continuation coverage in order to be eligible for HIPAA CHIP. This plan provides coverage for individuals with an uninsurable health condition, without preexisting condition exclusions or limitations, if there has not been a break in coverage of more than 90 days. We encourage you to apply for the HIPAA CHIP plan at least two months prior to your Illinois spousal continuation coverage expiration in order to allow ample time for the application to be processed. For an application and information, you should contact the Illinois Comprehensive Health Insurance Plan (ICHIP) at (866) 851-2751 or at http://www.chip.state.il.us.
NOTE: If you have a medical condition that renders you uninsurable and you elect a conversion policy rather than HIPAA CHIP, you will lose your rights to elect HIPAA CHIP. If you elect the conversion policy and then decide, for whatever reason, to drop it, you will not be eligible for the HIPAA CHIP plan. You will have to apply for coverage with the regular CHIP plan, which may have a waiting list and does not pay for preexisting conditions for the first six months of coverage.
Give us a call at 800-391-7469 if we can answer any of your questions.
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