Colorado Continuation/Conversion is a state law that assures an employee who leaves a company with less than 20 full time employees and has been covered by the firm’s health insurance plan for 6 continuous months, a continuation of their health insurance coverage for up to 18 months, except in cases of “gross misconduct.” For an employee leaving a Colorado based company with more than 20 employees, the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) applies.
The ex-employee will be responsible for the full premium (the combination of that which the employer and the employee were previously paying) plus a small administrative cost.
Within 10 days of termination, the employer must sent written notice to the employee of the right to continue. The employee then has an “Election Period” of 30 days from termination to notify the employer of acceptance.
If after this period the employee decides they do not want to accept Continuation coverage, they owe nothing. However, if they do decide they want to accept the coverage, they will owe premium back to their last day of employment.
One concern with smaller companies is that if the firm goes out of business and/or cancels their health insurance plan, this whole option disappears for the ex-employee.
Colorado Continuation/Conversion is a form of “group health insurance” and generally cannot exclude coverage for pre-existing conditions. However, because of this, the premiums are much higher than a relatively healthy person or family could obtain with an individual policy.
If you would like to know more about your options, please give me a call at 303-541-9533.
