What Is Continuation Coverage
Continuation coverage is your legal right to keep an employer-sponsored health plan for a limited time after a qualifying event, such as job loss, reduction in hours, or divorce. The two main mechanisms are COBRA (federal) and state continuation laws, which vary by location. You typically pay the full premium yourself, plus a 2% administrative fee under COBRA.
Coverage Duration and Costs
COBRA continuation generally lasts 18 months for job loss or reduced hours, 36 months for loss of coverage due to divorce or death of the employee, and 29 months if you're disabled when coverage ends. Premiums are substantially higher than when your employer subsidized the plan. For example, an employer covering 80% of premiums means you suddenly pay the full amount plus the 2% fee. Some state continuation laws (Connecticut, Florida, Texas, and others) offer shorter but cheaper alternatives to COBRA, so check your state's insurance commissioner website for options specific to your location.
Claims and Appeals During Continuation
Claims submitted during continuation coverage are treated identically to claims under your original plan. You'll still receive Explanation of Benefits (EOBs) for each claim showing what the insurer paid, what you owe, and denial reasons. If a claim is denied, you have the same appeal rights you had before continuation. Most insurers require internal appeals to be filed within 30 to 60 days of the EOB date. If the internal appeal fails, you can request external review, though timeframes vary by state. Prior authorization requirements don't disappear during continuation, so verify coverage before scheduling procedures.
Medical Necessity and Denials
Insurance companies frequently deny claims during continuation coverage by claiming lack of medical necessity. Your EOB will reference the plan's definition of medical necessity and explain which criteria weren't met. When appealing, gather clinical documentation from your provider that directly addresses the insurer's stated reason for denial. Don't assume continuation coverage is treated as a lower-priority claim type. It carries the same legal protections, including the right to appeal based on medical necessity disagreements. State insurance regulations often require insurers to respond to appeals within 30 days for standard reviews and 72 hours for urgent care denials.
Common Questions
- Can an insurer deny a claim because I'm on continuation coverage? No. Your eligibility for coverage and claim benefits remain the same. Denials must be based on plan terms, medical necessity, or policy exclusions, not your continuation status.
- What happens to my appeal rights when continuation coverage ends? Once coverage terminates, you cannot appeal new claims, but you can continue appealing claims filed while you were covered, typically for up to one year after termination depending on state law.
- Do prior authorization requirements still apply on continuation coverage? Yes. Failing to obtain prior authorization before a procedure can result in claim denials even during continuation. Check your plan documents or call the insurer before scheduling elective care.