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. Kentucky has a similar law that covers plans not covered by federal COBRA, but offers less protection (KY Rev. Stat. Sec. 304.18-110). Kentucky also has a law giving employees the right to convert to individual coverage. According to federal law, when comparing state and federal continuation rights, employees may select the law that is more favorable to their situation. The state continuation requirements apply to insurance policies that cover a Kentucky insured and bear a reasonable relation to Kentucky, regardless of whether the policy was delivered or issued for delivery in Kentucky.
Kentucky's continuation law applies to fully insured health insurance plans that provide hospital and surgical benefits and are not covered by federal COBRA because the employer has fewer than 20 employees. Employees and their dependents who have been covered for 3 months are entitled to extend group coverage for 18 months after the date on which the coverage would have otherwise ended. To be eligible for continuation, an individual must have been covered for 3 months before the triggering event. Events that trigger the right to continuation coverage include:
• An employee no longer being a member of the group entitled to coverage;
• A surviving spouse and children whose coverage under the group policy would end because of the death of the employee;
• A child who has been covered as a dependent under the plan upon reaching the plan's age limit for dependent status; and
• A former spouse and the children in his ...