Your Employer May Be Required to Continue Your Insurance
If you retire before age 65, federal and state legislation may require your employer to allow you to continue your health insurance. Ask your employer the following questions:
- Can I continue my group health insurance once I retire?
- If I can, what benefits will be provided and for how long?
- Can I continue coverage for my dependents?
- How much will the insurance cost?
Two different laws apply to health insurance continuation:
- COBRA: Federal legislation that applies to employers with 20 or more employees
- Illinois legislation (Public Act 86-1444) that applies to most IMRF employers
One major difference between these two laws is the length of time you can continue your employer's insurance.
COBRA: Federal Law for Continuing Health Insurance
Under COBRA, most employers must allow you to continue your insurance for a minimum of 18 months after you retire.
If you choose health insurance continuation under COBRA and are not yet age 65 (Medicare eligible):
- You can continue the insurance for 18 months or until you reach age 65, whichever occurs sooner.
- When you become eligible for Medicare, you are no longer eligible for COBRA.
However, if you are already eligible for Medicare when you stop working, you can continue your employer's insurance for 18 months.
With COBRA, certain qualifying events allow your spouse and dependent children to extend the health insurance for an additional 18 months. One such qualifying event is if you qualify for Medicare after your COBRA continuation begins. Even though you are no longer covered under your employer’s health insurance, your spouse and dependents can be. Their coverage will continue for an additional 18 months after your coverage ends.
Continuing Under Illinois Law
Under Illinois legislation, health insurance continuation is not limited to a specific number of months. The Illinois Department of Insurance issued an opinion that:
- The right to health insurance continuation does not end with Medicare eligibility.
- Your employer may reduce the insurance benefits for retired employees who are eligible for Medicare
If you want to continue your health insurance under Illinois law after you become eligible for Medicare, we advise you to contact the Illinois Department of Insurance, Consumer Services Division at 877-527-9431.