Both Wisconsin 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, employees may utilize the law that is most favorable to their situation.
Wisconsin's continuation law applies to most group health insurance policies that provide hospital or medical coverage (Wis. Stat. Sec. 632.897). The law applies to group policies issued to employers of any size. The law does not apply to employer self-insured plans or policies that cover only specified diseases or accidental injuries. The state law gives the following Wisconsin residents who have been continuously covered under a group health insurance policy for at least three months the right to continue the group coverage or to convert to an individual policy providing similar benefits:
• A former spouse whose coverage ends because of divorce or annulment;
• A group member who would otherwise terminate eligibility for coverage under the group policy (except for group members who terminate eligibility for coverage due to discharge for misconduct shown in connection with their employment); and
• A covered spouse and/or dependents of an employee who has died.
Continuation of group coverage must be provided to an eligible individual for 18 months unless one of the following events occurs earlier:
• The individual establishes residence outside Wisconsin;
• The individual becomes eligible for similar coverage under another group policy; or
• In the case of a divorced nonemployee spouse, the employee loses eligibility for group coverage.