Illinois Health Insurance Continuation Law
Authoritative Illinois References
We're providing only an overview of the Illinois continuation rules. More complete information can be found at the State of Illinois Division of Insurance website and at the Illinois General Assembly website:
Applies to Employers of All Sizes
COBRA generally applies to employers with 20 or more full-time employees, but the Illinois continuation law applies to ANY group health plan issued and delivered in the State of Illinois, including companies in which only one or two employees are insured under the group plan.
The Illinois continuation law does not apply to self-insured plans (though employees and dependents of these groups typically have benefit continuation protection through COBRA). Also, some different continuation rules, which we won't address here, apply to participants in the Illinois Municipal Retirement Fund.
Continuation for Employees and Dependents
To be eligible for Illinois continuation, an employee must be covered by the group health plan or HMO for three continuous months before the qualifying event. Coverage is the same as under the group plan, but (unlike COBRA), need not include vision, dental or prescription drug plans.
Coverage under Illinois continuation is for nine months maximum. The nine month maximum continuation applies to the employee and (if applicable) spouse and children. The full premium, including the amount previously contributed by the employer, is paid by the person continuing coverage.
Additional Rights for Spouses and Children
Illinois mandates additional continuation benefits for spouses and children who are losing group coverage because of divorce, because of the employee's death or due to the employee's retirement. Spouses and children in such circumstances are eligible to continue group health coverage for up to two years if they were covered the day prior to the qualifying event (divorce, death or retirement).
Enhanced Rights for Spouses age 55 or more
This extended continuation also applies to the spouse's dependent children who have not reached the plan's age limit (such as age 23 for a full-time student). In addition, these spouses are eligible to continue benefits such as dental and vision.
The employer may add an administrative fee of 20% of premium after the spouse has been covered under the continuation plan for two years. If the spouse remarries or becomes covered under another group plan, coverage continuation is terminated.
Continuation for Dependent Children
When a child's health insurance terminates because the child has reached the plan's age limit (such as age 23 for a full-time student), continuation coverage is provided for a maximum of two years and benefits must be the same as provided under the group plan.
With the exception of circumstances involving a spouse age 55 or more (see above), a maximum two year continuation applies for children when the employee retires or upon the employee's death.
Paying for Illinois Continuation
Under COBRA, employers may add a 2% administrative charge to the total premium. However, under Illinois continuation, no such additional fee may be included, except for the 20% charge that can be applied after two years to spouses of retired employees -- when the spouse began Illinois continuation on or after age 55.
