Benefits and Compensation

Divorcing Employee? Former Spouse May Elect to Continue Group Coverage

Yesterday, attorney Kathryn Grigg of Axley Brynelson, LLP, explained employers’ obligations to offer health insurance continuation and conversion benefits to an employee’s former spouse and dependents following a divorce. Today, she’ll discuss how the election to continue coverage works—and the circumstances under which that coverage may be terminated early.

Election to Continue Group Coverage

Under federal law, the former spouse has 60 days after receiving the notification from the plan administrator in which to elect continuation of coverage. The plan must permit payment for continuation coverage during the period preceding the election so that the former spouse can be assured of no gaps in coverage.

The former spouse must make the payment within 45 days after the election. Coverage must continue without interruption and may not terminate for 36 months, unless:

  1. The former spouse fails to make timely payment.
  2. The employer ceases to maintain any group health plan.
  3. The former spouse begins coverage under another group plan.
  4. The former spouse becomes entitled to Medicare benefits.
  5. The former spouse engages in conduct that would justify the termination of coverage of a similarly situated participant (e.g., fraud).

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The Date of Notice Is Important

You must pay special attention when you’re notified of an employee’s divorce. Notice that the divorce has been officially granted (not merely that it’s pending) triggers a deadline by which the employee’s former spouse must receive written notice of his or her continuation or conversion options for group or individual plans. If the former spouse makes a timely election, take care to ensure that there are no gaps in coverage.

Although you aren’t responsible for any share of the premium costs for the former spouse’s plan, be prepared for the burden of administrative costs and time.

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