Group Health Plan Continuation Coverage and Conversion Requirements

Employees with different jobs

Continuation Coverage

Minnesota law requires that insured group health plans and plans established by employers through HMOs governed by Minnesota law allow covered employees who are voluntarily or involuntarily terminated (other than for gross misconduct45) from employment to elect to continue coverage for the employee and the employee’s dependents.46 The employee is eligible to continue coverage for 18 months after termination, or until he or she becomes covered under another group health plan, whichever is shorter215 and runs concurrently with the federal COBRA continuation period. Since COBRA only applies to employers with 20 or more employees, many smaller employers who offer health insurance to their employees will be subject only to the requirements of Minnesota law.

The employer has the duty to inform the employee within 14 days after his or her termination or layoff of:

  • the right to elect to continue coverage;
  • the amount the employee must pay monthly to the employer to retain coverage;
  • the manner in which and where the payment to the employer must be made; and
  • the time by which the employee must make payments to the employer in order to retain coverage.216

The notice must be in writing and sent by first class mail. The employee has 60 days within which to elect coverage.

Conversion to Individual Policy

Group health plans required to follow Minnesota law with regard to continuation coverage (above) are also required to allow a covered employee, surviving spouse, or other dependent to obtain from the insurer the option to obtain an individual policy of insurance at the end of the continuation coverage period. The employee, spouse, or dependent does not have to provide further evidence of insurability to obtain the conversion policy and coverage must not be interrupted.217 Employers that do not offer coverage through an insurance policy subject to state law (i.e., all self-insured) are not required to offer this conversion right.

CREDITS: This is an excerpt from An Employer’s Guide to Employment Issues in Minnesota, provided by the Minnesota Department of Employment and Economic Development & Linquist & Vennum P.L.L.P., Tenth Edition, 2009. Copies are available without charge from the Minnesota Department of Employment and Economic Development, Small Business Assistance Office.

This post is also part of a series of posts covering the Continuation of Group Health and Life Insurance Coverage Law (COBRA). This information is not legal advice. You should consult with an experienced employment attorney before dealing with COBRA-related employment issues.

215 29 U.S.C. § 1132(g).
216 Minn. Stat. § 62A.17, subd. 5 (2010).
217 Minn. Stat. § 62A.17, subd. 6 (2010).