COBRA/Chapter 375 Comparison

The information below is for use by employees who are considering COBRA and Chapter 375 coverage.

 

COBRA (Consolidated Omnibus Budget Reconciliation Act)

 Chapter 375
(SHBP Coverage of Children to Age 31)
Who is eligible?

A "dependent" child is eligible:

  • if he or she moves out of the household
  • attains the age of 26
  • marries or enters into a civil union or domestic partnership
  • employee holding the policy passes away
  • ineligibility of coverage due to an employment status change or the employee elects Medicare as a primary insurance carrier.

An unmarried child under the age of 31 is eligible as long as he or she meets ALL of the following:

  • he or she has no dependents of his/her own
  • and is a resident of NJ or is a full-time student at an accredited public or private institution of higher education with at least 15 credit hours
  • and is not provided coverage as a subscriber, insured, enrollee, or covered person under a group or individual health benefits plan, church plan, or entitled to Medicare benefits.
What is the coverage? COBRA allows the over age dependent to temporarily extend his or her group health coverage. This continuation of group health coverage allows the over age dependent to participate in the SHBP medical, prescription, dental plans. At the time of enrollment the over age dependent may elect to remain in the plan he or she previously had as an eligible dependent or select a different plan. Chapter 375 stipulates that the over age dependent remain in the same medical and/or prescription plan as the parent is on through the State Health Benefits Program (SHBP). There is no provision for dental or vision benefits.
Which plan should I choose? A dependent child covered under the SHBP is automatically deleted from SHBP coverage as of December 31 of the year the child turns age 26.  Members and eligible dependents should carefully compare their coverage options before selecting either type of coverage over the other.  Depending on the parent's coverage selections, COBRA may provide separate enrollment for dental plan benefits.  The COBRA coverage period usually is for 36 months. A dependent child covered under the SHBP is automatically deleted from SHBP coverage as of December 31 of the year the child turns age 26.  Members and eligible dependents should carefully compare their coverage options before selecting either type of coverage over the other.  For medical plan and prescription drug benefits, recent changes to chapter 375 have made premiums required for Chapter 375 coverage less expensive than COBRA coverage.  An eligible over age child can be covered under Chapter 375 coverage to age 31.
I have a disabled adult child, which plan should be elected? A disabled child who is currently covered under the State Health Benefits Program at the end of the year that they turn 26 may qualify to remain covered as a dependent if approved by the SHBP. The child must be disabled due to mental illness, mental retardation, or physical disability and dependent on you for support. You can contact the Division of Pensions and Benefits for a "Dependent with Disabilities" form at 609-292-7524. For additional information please review Fact Sheet # 51 Continuing Health Benefits Coverage for Over Age Children with Disabilities. A disabled child who no longer an eligible dependent at the end of the year that they turn 26 may qualify to remain covered as a dependent if approved by the SHBP. The child must be disabled due to mental illness, mental retardation, or physical disability and dependent on you for support. You can contact the Division of Pensions and Benefits for a "Dependent with Disabilities" form at 609-292-7524. For additional information please review Fact Sheet #51 Continuing Health Benefits Coverage for Over Age Children with Disabilities.
When can I enroll? Enrollment must be completed within 60 days of the last day of coverage. If you elect the coverage it will be retroactively effective to the date coverage was terminated. A SHBP covered employee or retiree may enroll an over age child who is Chapter 375 eligible until the child's 30th birthday at the following times: within 30 days prior to December 31 of the year the dependent reaches age 26 with coverage effective the following January 1; within 30 days of coverage loss, the covered employee provides proof of loss of other group coverage (HIPPA) for the Chapter 375 eligible over age child with coverage effective the date that the prior coverage was terminated; or, during the Annual SHBP Open Enrollment period, typically held during the month of October of each year if the over age child meets the eligibility requirements of Chapter 375 with coverage effective the following January 1.
What do I need to enroll? A COBRA and HIPAA notice will be mailed to your home. Continuation of coverage elections must be made in Benefitsolver within 60 days of the loss of coverage. Failure to do so within the time frame allowed by law is considered a decision not to enroll. Navigate to mynjbenefitshub, or you may log in through myNewJersey.

Active employees MUST submit Chapter 375 applications online using Benefitsolver. Navigate to mynjbenefitshub, or you may log in through myNewJersey.
How long does the coverage last? Loss of coverage because the child has aged out of the system at the end of the year that they turn 26, death of an employee, or divorce allows a continuation for 36 months. If coverage is lost due to another life event, the coverage continuation period is 18 months. Coverage for an enrolled over age child will continue up to age 31 provided the child meets eligibility requirements.
Can I lose coverage? If you become covered under another plan as an employee or dependent unless the plan has a pre-existing conditions clause, become eligible for Medicare, you fail to pay the premiums, or the period of continuation ends. If the child no longer meets any one of the eligibility requirements, or the parents coverage ends, or for non-payment.
Can I drop the coverage at anytime? Yes. Yes.
How much does it cost?

COBRA rates are calculated by taking the full rate and adding a 2% administrative fee. View COBRA health rates and COBRA dental rates. 

Businessolver will bill you on a monthly basis.

 The covered parent will be billed monthly for his or her child’s coverage by the SHBP. View Chapter 375 Rates.
May I extend the coverage beyond the standard time period.? No, you would need to obtain an individual policy. For information on individual policies, visit the State of NJ Department of Banking and Insurance. No, you would need to obtain an individual policy. For information on individual policies, visit the State of NJ Department of Banking and Insurance.
Where can I obtain additional information? Visit the Division of Pensions and Benefits website. Visit the Division of Pensions and Benefits website.
Who can I contact with questions? Division of Pensions and Benefits at 609-292-7524  Division of Pensions and Benefits at 609-292-7524