What is the New Jersey continuation law?
Pursuant to New Jersey law (N.J.S.A. 17B:27A-27), small employers must offer employees the option to continue their group health coverage when an employee is terminated, goes to part-time status, or ends employment. The employer may require the employee to pay for this coverage in an amount not to exceed 102% of premium. Employers with 20 or more employees (except for the Federal government and certain church-related organizations) must offer continuation of coverage under federal law, commonly referred to as "COBRA," which contains provisions which differ from those described below. State continuation of coverage is available to employees of small employers who are not subject to COBRA.
Under State continuation of coverage, a terminated employee or one on part-time status has the right to continue coverage for up to 12 months. New Jersey small employers have an obligation under State law to notify their employees of the right to continue coverage at the time of termination or at the time the employee assumes part-time status.
An employee who elects State continuation of coverage is required to provide his or her employer with a written request to continue coverage within 30 days of either the termination or the effective date of the decrease in work hours. An employee on State continuation of coverage pays his or her premium to the employer who remits the payment as part of the employer's regular premium payment. The decision to continue coverage under State law may be made by the employee only; dependents do not have an independent right to elect continuation. An eligible dependent may continue coverage only as long as the former full-time employee is covered as a continuee.
The policy or contract issued to the employer, and the certificate or evidence of coverage issued to the covered employees, more fully outline the procedures that an employee must follow to effectuate State continuation of coverage.