New Jersey Health Insurance Continuation (COBRA) laws & compensation compliance analysis

New Jersey Health Insurance Continuation (COBRA): What you need to know

Both New Jersey 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 can use the law more favorable to their situation. New Jersey law also requires plans that provide dependent coverage with an age limit of less than 30 to provide continuation coverage until the dependent reaches age 31.
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New Jersey's general continuation law applies only to small employers with 50 or fewer employees and does not apply to employees who are eligible for continuation coverage under federal COBRA. As a practical matter, this law applies to employers that are not subject to the federal law because they have fewer than 20 employees or are exempt as church plans.
Continuation coverage must be identical to the coverage provided under the insurance policy to similarly situated beneficiaries. If coverage is modified for any group of similarly situated beneficiaries, it should be modified in the same way for those who are receiving continuation coverage (N.J. Stat. Sec. 17B:27A-27).
The New Jersey continuation requirements provide continuation rights that are very similar to federal COBRA for spouses and dependent children. Unlike federal COBRA, the New Jersey continuation requirements apply to civil union partners in the same way that they apply to spouses (N.J. Stat. Sec. 37:1-32). Even if a small employer is generally following federal COBRA (e.g., because it has between 20 and 50 employees), an employee’s civil union partner may elect state COBRA if the partnership is dissolved.

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