Both Tennessee law and the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) permit employees to continue their group health coverage if they lose coverage for certain specified reasons. Tennessee's requirements apply to all insured group plans that provide hospital, medical, or surgical benefits (TN Code Ann. Sec. 56-7-2312). The law covers all such plans regardless of the size of the employer, but it provides for a shorter continuation period than does federal COBRA. According to federal law, when comparing state and federal continuation rights, employees may use the law that is more favorable to their situation.
Tennessee law requires that group insurance, which provides hospital, surgical, or major medical benefits, allow an employee whose insurance has been terminated for any reason and who has been continuously insured under the group policy for at least three months to continue such coverage for the part of the policy month remaining at termination plus three additional policy months. Full payment of the entire monthly group premium for this continuation of coverage must be paid to the employer on or before the beginning of each month's coverage.
An employee is not entitled to have coverage continued if the group policy was terminated in its entirety or was terminated for the insured class to which the employee belonged. The employee has the right to conversion if he or she loses coverage for these reasons.
An employee is not entitled to have coverage continued or a converted policy issued if the termination of the employee's insurance occurred because:
• The employee failed to pay any required contribution;
• The employee is eligible for Medicare; or