Arizona COBRA (Health Insurance Continuation) laws & HR compliance analysis

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

Federal law requires continuation of coverage when an employee or beneficiary loses insurance coverage because of certain events.
Both Arizona law and the 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 may use the law that is more favorable to their situation. Unlike federal COBRA, Arizona's continuation law covers employers with fewer than 20 employees.
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Arizona enacted a continuation law in 2018. Beginning January 1, 2019, employers with fewer than 20 employees must offer continuation of health coverage to employees and their dependents.
The law mirrors the federal COBRA statute, except that COBRA allows employers to add a 2 percent administrative fee to premium payments, while small employers in Arizona will be able to charge a 5 percent fee. Also, while COBRA rights are triggered for persons covered under the plan before the qualifying event occurred, in Arizona, a plan enrollee doesn’t qualify for continuation coverage unless enrolled in the plan for at least 3 months before a qualifying event occurs (AZ Stat. Sec. 20-2330).
In Arizona, disability insurance policies must provide for the right of covered family members to continue coverage after the death or divorce of the named insured (AZ Stat. Sec. 20-1377).
The insurer can choose whether to continue coverage under the existing policy or to issue a converted policy. Coverage provided by such a conversion policy must provide the same benefits as the terminated policy, unless a lesser form of ...

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