Kansas Continuation Coverage and COBRA for Employers

When an employee leaves a Kansas company, their group health coverage does not always end that day. Federal COBRA covers larger employers. Smaller employers with an insured group plan are covered by a Kansas law that works much the same way, often called Kansas mini-COBRA or state continuation.

Here is what the statute actually says, which employers it reaches, and how it fits with federal COBRA.

Which law applies to your company

Start with headcount. Federal COBRA does not apply to a group health plan for a calendar year if all employers maintaining the plan normally employed fewer than 20 employees on a typical business day during the preceding calendar year. That rule is in 29 U.S.C. 1161(b).

Kansas fills that gap. K.S.A. 40-2209(i) requires continuation in insured group health policies, and it exempts groups whose employer is already subject to federal COBRA, to the extent federal law gives equal or greater rights. So, as a working rule:

• Fewer than 20 employees, insured group plan: Kansas state continuation under K.S.A. 40-2209(i) and (j).
• 20 or more employees: federal COBRA, with Kansas conversion rights still in play at the end.

The Kansas section is written for group policies issued by an insurer. If your plan is self-funded or level-funded, ask the administrator how continuation works for a group under 20, since the state law reaches insurance policies.

Kansas continuation: who qualifies

Under K.S.A. 40-2209(i), an employee or covered dependent whose group coverage ends for any reason can keep it if they were continuously insured under the group policy, or a policy it replaced, for at least three months right before coverage ended. That includes the group policy ending entirely or for a whole class of employees.

The statute lists five cases where continuation is not required:

1. The person did not pay a required contribution after reasonable notice from the insurer.
2. The discontinued group coverage was replaced by similar group coverage within 31 days.
3. The employee is or could be covered by Medicare.
4. The person is or could be covered to the same extent by another insured or self-insured group plan they were not covered under before.
5. Coverage ended for cause, as allowed by the approved group policy or certificate.

Rights also extend to family members under K.S.A. 40-2209(j)(16). A surviving spouse and children can continue when the employee dies. A spouse can continue after ceasing to qualify as a family member, such as after a divorce. A child can continue on aging off the plan.

How long it lasts and what it costs

Kansas continuation lasts 18 months. The statute sets the price too. Under K.S.A. 40-2209(j)(3), the former employee pays the insurer the premium for continuation, and that premium is the same as the rate for employees still in the group. If the person stops paying, coverage ends at the end of the period they paid for.

That is a real difference from COBRA. Federal COBRA lets a plan charge up to 102% of the applicable premium under 29 U.S.C. 1162. The Kansas statute does not include that extra 2%.

A note on cost: under continuation, the employee usually pays the full group rate, including the share the employer used to cover. People who paid a small payroll deduction often get sticker shock. Our cost guide explains how group rates are set.

The employer's job and the conversion option

The employer's duty is written plainly in K.S.A. 40-2209(j)(3): give the employee and covered dependents reasonable notice of the right to continuation. Build that into your exit checklist for every departure, voluntary or not.

At the end of the 18 months, Kansas law gives a second step called conversion. The insurer must offer a converted policy that meets the statute's requirements. The main points from K.S.A. 40-2209(i) and (j):

• The person can choose a conversion policy instead of continuing group coverage.
• Written application and the first premium for the converted policy are due within 31 days after group coverage ends, or within 31 days after the conversion notice is received.
• The converted policy is issued without evidence of insurability.
• It starts the day after group coverage ends, so there is no gap.
• The insurer must give notice of the right to convert at least once during the 18-month continuation period. For people on federal COBRA, the notice comes at least 30 days before COBRA ends.

K.A.R. 40-4-36 says what that conversion notice must include: the conversion options, the premium for each, and the steps to convert.

The statute does not spell out a separate election window for the 18-month continuation itself. We check the deadline in your carrier's certificate of coverage and pass it along so your notice to the employee is accurate.

Federal COBRA for 20 or more employees

Once you normally employ 20 or more, federal COBRA under ERISA takes over. The main rules, from 29 U.S.C. 1161 through 1166:

• Qualifying events include job loss (other than for gross misconduct), reduced hours, the employee's death, divorce or legal separation, Medicare entitlement, a child aging out, and certain employer bankruptcies.
• Duration is 18 months after job loss or reduced hours. It runs 36 months for most other events, and can stretch to 29 months with a qualifying disability.
• Premium can be up to 102% of the plan cost.
• Election period is at least 60 days, counted from the later of the date coverage ends or the date the election notice is sent.
• Notice timing: the employer tells the plan administrator within 30 days of job loss, reduced hours, death, Medicare entitlement or bankruptcy. The administrator then has 14 days to notify the person.

The DOL's COBRA page confirms it generally covers plans of employers with 20 or more employees in the prior year. Our large group guide covers more of the federal rules for bigger plans.

Common Kansas situations

A few cases we see often:

• A 12-person Topeka office lets an employee go. If they were on the plan three months or more, Kansas continuation applies for up to 18 months at the group rate.
• A small Hutchinson firm switches carriers. If the new group plan replaces the old one within 31 days, the old policy does not owe continuation. Former employees already on continuation need a plan for the move, so tell us when you quote.
• A Salina employee turns 65. If they are or could be covered by Medicare, Kansas continuation is not required under the statute.
• A company grows past 20. Federal COBRA applies for a calendar year based on headcount in the prior year, so track your numbers at year end.

Need to check what your plan's certificate says, or set up a clean exit process? Our requirements guide covers the rest of the rules, and you can reach us through the quote page.