The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) and South Dakota law both permit employees to continue their group health coverage if they leave the group for certain specified reasons.
In most cases, federal and state law do not overlap because federal law covers employers with 20 or more employees while South Dakota's basic continuation law covers employers with fewer than 20 employees. South Dakota also has a provision requiring continuation or conversion to be provided by a group insurer when the employer ceases operations or terminates the insurance policy. Federal law does not require continuation at all in this situation.
South Dakota's continuation requirements apply to any group health policy sponsored by an employer with fewer than 20 employees that covers hospital, nursing, medical, or surgical services (S.D. Codified Laws Sec. 58-18-7). Continuation coverage for 18 months must be provided to employees upon leaving employment or the termination of the coverage by the insurer and their eligible dependents (S.D. Codified Laws Sec. 58-18-7.5). Continuation must be provided for 29 months if the employee or one of his or her dependents is determined to have been disabled by the Social Security Administration at any time during the first 60 days of continuation coverage. Continuation coverage for 36 months must be provided to a spouse or dependent child who loses coverage due to the death of the employee, the employee being eligible for Medicare, divorce or legal separation of the employee, or exceeding the plan's age limit for dependents (S.D. Codified Laws Sec. 58-18-7.12).
Continuation does not have to be offered or renewed in the following circumstances:
• The individual becomes covered for similar benefits by another individual or group policy or under any state or federal law after continuation is elected;