New Mexico COBRA and Mini-COBRA Guide for 2024

Continuing legislative changes are making COBRA harder to administer, not easier. New Mexico is one of many states where employers must not only comply with the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), requiring continuation of coverage for employee benefits, but also with state COBRA continuation of coverage laws.

This article will guide employers through New Mexico COBRA laws and how to manage compliance.

New Mexico COBRA Overview

COBRA ensures that employees and their families still have access to employer-provided healthcare benefits for a limited period of time under specific circumstances and life-changing events.

The general purpose behind state-specific COBRA laws is so that employees of smaller businesses that are not covered by federal COBRA are still guaranteed continuation of coverage. Although, some states do have expanded timelines or requirements for continued coverage.

With the right benefits partner, employers can spend time managing employees, not administering COBRA. Additionally, a benefits partner can help manage initial benefits eligibility, open enrollment, and ongoing benefits changes properly.

Federal COBRA Law

Federal COBRA continuation of coverage requirements apply to private-sector employers who maintain group healthcare plans with 20 or more employees.

New Mexico Continuation of Coverage Law

Under New Mexico's continuation of coverage law, all employees that work for an employer that offers a health insurance policy providing hospital, surgical, and medical expense benefits are covered and guaranteed continuation of coverage for themselves and covered family members when they would otherwise lose group health insurance coverage due to certain specified events. 

Coverage can last up to three years unless group health insurance was lost due to termination of employment or a reduction in hours. In that case, the required continuation coverage period is 18 months.

New Mexico COBRA Qualifying Events

Employees in the state of New Mexico have the right to continuation of coverage as a result of losing coverage due to the following events:

• Death of a spouse
• Termination of a spouse’s employment 
  • For reason other than gross misconduct
• Reduction in a spouse’s hours of employment
• Divorce or legal separation
• If a spouse becomes entitled to Medicare.

In the case of a dependent child of a covered employee, the right to continuation of coverage is granted due to loss of coverage due to the following events:

• Death of a parent
• Termination of parent’s employment 
  • For reasons other than gross misconduct
• Reduction in a parent’s hours of employment
• Parent’s divorce or legal separation
• Parent becomes entitled to Medicare
• Dependent child ceases to be a “dependent child” under the State of New Mexico eligibility rules

The right to continuation of coverage does not apply if coverage terminates for:

• Nonpayment of premium
• Nonrenewal of the policy 
• The expiration of the term for which the policy is issued. 

Additionally, the right to continuation of coverage by an employee or covered family member who is eligible for Medicare is limited to coverage under a Medicare supplement insurance policy.

New Mexico Continuation of Coverage Notices

Insurers are required to notify employees in writing of the availability of continuation coverage when a qualifying event occurs. Alternatively, the employer may give this written notice.

Employees and / or family members have 60 days to then elect for continuation of coverage.

Premium Payments

The eligible employee or covered family member exercising the right to continue coverage must notify the employer or insurer and make payment of the applicable insurance premium within 30 days following notice of the availability of continuation coverage by the insurer (or the employer).

New Mexico COBRA Compliance Management

COBRA and continuation of coverage is an important area of labor law compliance, particularly in states with state-specific COBRA laws. And while compliance is tough enough as it is, continuing legislative changes are making COBRA even harder to administer, not easier.

With the right benefits partner and solution, you can spend your time managing your workforce, not administering COBRA. Other benefits of managing COBRA compliance with the help of a benefits provider include:

• Reduced risk of fines and lawsuits for compliance errors
• 30 years of industry-leading COBRA knowledge and experience
• Easy web-based or EDT reporting
• COBRA notices that exceed DOL requirements

So, employers in New Mexico who are struggling with COBRA management and continuation of coverage compliance may want to consider reaching out to a New Mexico Insurance Broker or HR consultant for help. 

To get connected with a provider in New Mexico, contact us today.

Guest Author: Andrew Siegel

Andrew Siegel is the CEO and Founder of Payday HCM, a New Mexico payroll services company serving small and large firms with single-point-of-contact solutions for payroll, employee benefits, outsourced HR, and staffing. An expert in the HCM industry and accomplished author of Employee Engagement: The Path Payday HCM Path to Productivity and Profitability, Andrew has almost 40 years of experience helping countless businesses across the country manage their biggest asset: their employees.