The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees the right to continue their group health insurance coverage if they leave the group for certain specified reasons. Illinois has a similar law that covers more employers but generally offers less protection (215 ILCS 5/367e). Illinois, however, offers greater protection to spouses aged 55 or older and their dependents upon divorce or death of the employee. According to federal law, when comparing state and federal continuation rights, employees may select the law that is more favorable to their situation.
The Illinois continuation requirements apply to fully insured group plans that cover employees for hospital, surgical, or major medical expenses and fully insured group HMO contracts.
Termination of employment or reduction in hours. Individuals whose health insurance terminates due to termination of employment or reduction in hours must be offered continuation of coverage for themselves and their dependents for a period of 12 months. This requirement applies to fully insured group plans that cover employees for hospital, surgical, or major medical expenses and fully insured group HMO contracts. To be eligible for this coverage, an individual must have been continuously covered for at least 3 months immediately before the termination of coverage. Continuation does not have to be offered:
• If the employee was discharged because of the commission of a felony or theft in connection with his work for which the employer was in no way responsible; provided the employee admitted his commission of the felony or theft or was convicted or placed under court order supervision ...