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What are my responsibilities as an employer with HMO coverage?

The purpose of this webpage is to help you learn about coverage continuation rights that are available under a group health benefit plan. The primary coverage continuation rights and options that are available to a person who is no longer eligible for group HMO coverage are COBRA and State Continuation.

COBRA

The federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) applies to employers with 20 or more employees. It gives laid-off employees and their families the right to remain on whatever health plan the employer has for up to 18 months if they continue paying the full premium, which includes both the employer's share and the employee's share plus a 2 percent administrative fee. Employers who are subject to COBRA are required to give laid-off employees a written notice of their COBRA rights. The employees then have 60 days to decide whether to continue their health care coverage as provided by COBRA.

Detailed information about COBRA is available from the U. S. Department of Labor (DOL) via the Internet at www.dol.gov/dol/topic/health-plans/cobra.htm#doltopics. The DOL also has a free COBRA consumer publication. The publication is on DOL's web site, www.dol.gov, and printed copies can be obtained by calling 1-800-998-7542. The DOL's regional office in Dallas, 972-850-4000, also can answer questions about COBRA.

STATE CONTINUATION

Texas law provides coverage continuation rights for employees who are not covered by COBRA or who have exhausted their COBRA coverage. A former employee and their family may remain on their former health plans for up to nine months if not eligible for Cobra and six months if eligible for Cobra, by paying the full premium. This requirement applies only to health plans issued by licensed insurance companies and HMOs that are subject to the Texas Insurance Code. It does not apply to employer self-funded (ERISA) health care plans, which are exempt from state insurance laws.

This state continuation right is discussed in the Texas Department of Insurance's (TDI) consumer publication, Your Health Care Coverage. The publication is available online at: http://www.tdi.texas.gov/pubs/consumer/cb005.html. Printed copies can be obtained by calling TDI toll-free at 1-800-599-7467. Employers and consumers may also obtain information about state continuation requirements by calling TDI's Consumer Help Line at 1-800-252-3439.

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Last updated: 09/06/2014

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