I. INTRODUCTION
Nebraska has revised its laws in regard to continuation of insurance coverage relative to fired employees or surviving dependents of employees. The law may be found in sections 44-1640 through 1645 of the Nebraska Statutes. The following is a summary of the law which applies to employers having 19 or fewer employees and provides group health coverage.
II. GROUP INSURANCE CONTINUATION FOR INVOLUNTARILY TERMINATED EMPLOYEES
A. Who’s Covered?
An employer or employer trust group policy or contract which provides hospital, surgical or major medical coverage, or any combination of such coverages, on an expense incurred or service basis by an insurance company or health maintenance organization for employees or their families. A policy or contract which provides benefits for specific diseases or for accidental injuries only is not covered. However, employers with 20 or more employees are not subject to this state law, but are covered under a more stringent federal law called COBRA.
B. Who Gets the Option?
Employees whose group policy or contract would otherwise be terminated because of their involuntary termination of employment for reasons other than misconduct in connection with employment. Interruption of employment due to a labor dispute is not considered an involuntary termination of employment.
C. How Long?
Coverage shall be continued on a monthly basis until the earlier of the following dates: (1) the date of expiration of a period of six months following the date the coverage of the terminated employee would otherwise be terminated; (2) the date the terminated employee becomes eligible for other group hospital, surgical or medical coverage, whether insured or self-insured, or the date the terminated employee becomes eligible for Medicare; (3) the date of expiration of the monthly period for which premiums were paid in the event of a nonpayment of premium; (4) the date the terminated employee exercises the privilege provided under the group policy or contract for conversion to an individual or family policy or contract; or (5) the date on which the group insurance policy or health maintenance organization agreement is terminated or the date the employer or employer trust trustee terminates participation under such policy or agreement.
D. Premium
The monthly premium rate to be charged for such coverage shall not exceed one hundred two percent of the total premium which would have been charged for such coverage had the terminated employee still been a member of the insured group.
E. Who Pays?
The total premium rate is to be paid by the terminated employee.
F. Notice
Not later than ten days following the date of termination of employment of the employee, the employer shall send a notice by certified mail with return receipt requested to the terminated employee at his or her home address as shown on the records of the employer. The notice should include: (1) the right of the terminated employee to elect to continue coverage in accordance with section 44-1640 and the election form to be used in exercising such right; (2) the amount of each monthly premium to be paid by the terminated employee; and (3) the manner, time and to whom the election form shall be completed and returned and each monthly premium must be paid.
G. Election to Continue
If the terminated employee elects to continue such coverage, the election form and the first monthly premium shall be sent by certified mail with return receipt requested to the insurance company or health maintenance organization within ten days after the date or receipt of the notice. Premiums for each subsequent month are to be paid by the terminated employee without further notice to the insurance company or health maintenance organization.
III. GROUP INSURANCE CONTINUATION FOR SURVIVING SPOUSES AND DEPENDENT CHILDREN
An employer or employer trust group policy or contract which provides hospital, surgical or major medical coverage, or any combination of such coverages, on an expense incurred or service basis by an insurance company or health maintenance organization for employees and their dependents. A policy or contract which provides benefits for specific diseases or for accidental injuries only is not covered. However, employer with 20 or more employees are not subject to this state law, but are covered under a more stringent federal law called COBRA.
The covered surviving spouse or covered dependent children whose group policy or contract would otherwise be terminated because of the death of the employee.
Coverage shall be continued on a monthly renewable basis until the earliest of the following dates:
1. The date the covered surviving spouse or covered surviving dependent children become eligible for other group hospital surgical or major medical coverage, whether insured or self-insured, and with respect to the covered surviving spouse, the date such spouse remarries or the date such spouse becomes eligible for Medicare or is covered by Medicaid;
2. The date of expiration of the monthly period for which premiums were paid for the covered surviving spouse or covered dependent children in the event of nonpayment of premium;
3. The date the covered surviving spouse or covered dependent children exercise any privilege provided under the group policy or contract for conversion to an individual or family policy or contract;
4. The date on which the group insurance policy or health maintenance organization agreement is terminated, or the date the employer or employer trust trustee terminates participation under such policy or agreement; or
5. The date of expiration of a period of one year following the date of the coverage of the deceased employee would otherwise terminate.
The monthly premium rate to be charged for such coverage shall not exceed one hundred two percent of the total premium which would have been established for such coverage for the covered surviving spouse or covered surviving dependent children had the deceased employee still been a member of the insured group.
The total premium rate shall be paid by the covered surviving spouse or the covered dependent children.
Not later than ten working days following the date of the death of the employee, the employer is to send a notice by certified mail with return receipt requested to the covered surviving spouse or, if there be no covered surviving spouse, to any covered dependent children of the deceased employee, at his, her or their home address as shown on the records of the employer. The notice should include:
1. The right of the covered surviving spouse or the covered surviving dependent children to elect to continue coverage in accordance with section 44-1643 and the election form to be used in exercising such right;
2. The amount of each monthly premium to be paid by the covered surviving spouse or covered surviving dependent children; and
3. The manner, time and to whom the completed election form must be returned and each monthly premium must be paid.
If the covered surviving spouse or covered surviving dependent children elect to continue such coverage, the election form and the first monthly premium shall be sent by certified mail with return receipt requested to the insurance company or health maintenance organization within 31 days after the date of the death of the employee. Premiums for each subsequent month shall be paid by the covered surviving dependent children without further notice.