Both Iowa law and the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) permit employees to continue their group health coverage if they leave the group for certain specified reasons. According to federal law, when comparing state and federal continuation rights, employees may apply the law that is most favorable to their situation.
Continuation must be offered to employees, their spouses, and their dependents whose coverage would otherwise terminate because of termination of employment or membership in the group eligible for coverage (IA Code Sec. 509B.3). The spouse of an employee and any covered dependent children whose coverage under the group policy would otherwise terminate because of dissolution or annulment of marriage or death of the employee have the same continuation rights as terminated employees.
Iowa's continuation law covers insured group health insurance plans sponsored by all employers except those that self-insure. Continuation need not be provided for dental, vision, and prescription plans. Continuation is only available to an individual who was continuously insured under the group policy, and for similar benefits under any group policy that it replaced, during the entire three-month period immediately preceding the termination of coverage. Continuation does not have to be provided to a person who is or could be covered by Medicare. In addition, continuation does not have to be provided to an individual who is covered or is eligible to be covered by another group insured or uninsured arrangement that provides health coverage, unless the person was already covered by that other group policy before the termination of coverage.