Frequently Asked Questions • Cobra
What is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a set of federal laws that requires employers with 20 or more employees to offer employees who terminate their employment the opportunity to continue certain employee benefits. Typically, employees and their eligible dependents may continue coverage as COBRA beneficiaries for a period not to exceed 18 months. COBRA, and amendments to it, includes provisions for additional months if specific circumstances exist.
Is my company subject to COBRA?
Maybe. COBRA applies to any employer who maintains a group health plan and who normally employs at least twenty (20) employees on at least fifty percent (50%) of the working days during the prior calendar year. COBRA does not require that these days be consecutive.
What does COBRA consider a "Group Health" plan?
COBRA defines a Group Health Plan as a plan maintained by an employer to provide medical care to active employees and their families, and/or former employees and their families, whether directly, through insurance reimbursement, or otherwise. For the purpose of COBRA, medical care includes: Medical, Dental, Vision, Employee Assistance Programs (EAPs), and IRS Section 125 Health Care Reimbursement Accounts (HCRA).
Am I eligible for COBRA continuation coverage?
An individual who was covered under an employer’s group health plan
on the day before a Qualifying Event as a:
covered employee;
spouse of a covered employee;
dependent child of a covered employee; or
any individual covered under the plan by virtue of performance
of services by the individual (The intention here is to provide continuation
coverage to independent contractors only if the employer’s contract
with the carrier(s) allows for the extension of coverage to independent
contractors.)
is eligible for COBRA continuation coverage. Your period of eligibility for election of continuation coverage is 60 days beginning with the later of the date your coverage terminates or the date the COBRA election notice is mailed to you.
What is a Qualifying Event?
A Qualifying Event is an event that results in loss of group health coverage and which occurs:
in the case of a covered employee and his/her eligible dependents upon:
termination of the employee’s employment for any reason other than
gross misconduct; or
reduction of hours worked by the employee; or
retirement.
in the case of a covered spouse and his/her eligible dependents upon:
death of a covered employee; or
divorce or legal separation from a covered employee; or
termination of employment of an employee who is entitled to Medicare.
in the case of a covered dependent child, when he/she no longer qualifies as a dependent under the group health plan.
The Qualifying Event must cause the covered individual to
lose coverage. For purposes of COBRA, "loss of coverage" means
to cease to be covered under the same terms and conditions that were in
effect immediately before the qualifying event.
What benefits can I continue under COBRA?
According to COBRA regulations, you are entitled to continue
the benefits provided to you on the day before your Qualifying Event occurred.
In other words, you may continue only those benefits in which you were enrolled
on the day before your Qualifying Event. Medical, Dental, Vision, Employee
Assistance Program (EAP), and Section 125 Health Care Reimbursement Account
privileges must be extended under COBRA. Life/AD&D, Long Term Disability,
Short Term Disability, and Section 125 Dependent Care Reimbursement Accounts
are excluded from COBRA continuation coverage.
No. COBRA beneficiaries (people who are entitled to COBRA continuation coverage) may not make plan selection changes. If you were enrolled in your employers HMO on the day before your Qualifying event, then you are extended the right to continue participation in the HMO under COBRA. A COBRA qualifying event does not entitle you to change your plan selection.
Can I add dependents to my plan while I am on COBRA?
Yes, and No. If you acquire a new dependent through birth, adoption or marriage, you may add your new dependent to your coverage while you are on COBRA. Dependents who were eligible for coverage during your term of employment but chose not to enroll in the plan (waived coverage), are not eligible for addition to your plan while you are on COBRA.
How long can I stay on COBRA?
If your Qualifying Event was due to:Termination of employment; Reduction of hours; or Retirement of the covered employee; then the maximum period of COBRA continuation coverage for you and your eligible dependents is eighteen (18) months from the date of the qualifying event or from the date of loss of coverage.
If you or an eligible dependent was totally disabled on the date of the qualifying event or becomes totally disabled during the term of COBRA continuation coverage, and if;
the disabled individual was determined to be eligible for Social Security Benefits because of that disablility; and
the Plan Administrator was notified of the determination within the specified period; then
COBRA continuation coverage will be extended from eighteen (18) to twenty-nine (29) months.
If your qualifying event was due to:
the death of a covered employee; or
the divorce or legal separation of a covered employee; or
the termination of employment of a covered employee who is eligible for benefits under Medicare; or
a dependent child ceasing to qualify as a dependent under the employer’s plan; then
the maximum period of COBRA continuation coverage for an eligible spouse and/or dependent child(ren) will be thirty-six (36) months from the date of the qualifying event or from the date of loss of coverage.
Under what circumstances will my COBRA continuation coverage end other than the expiration of the maximum period of coverage?
Your coverage under COBRA will terminate if:
the sponsoring employer stops providing any group health plan to any of its employees; or
you or an eligible dependent fails to pay the premium; or
you or an eligible dependent becomes entitled to benefits under Medicare; or
you or an eligible dependent becomes covered as an employee or dependent under another group health plan.
Eligibility for another group health plan does not terminate your right to COBRA continuation coverage. You must be enrolled in another group plan for your COBRA continuation coverage to be affected.
What will my premium payments be if I elect COBRA continuation coverage?
If you elect COBRA continuation coverage, you are responsible for payment of premiums. Premium may not exceed one hundred two percent (102%) of the entire premium paid for an active employee. You may choose to make your COBRA premium payments in monthly installments. All premium payments must be made to the employer or their duly appointed COBRA plan administrator.
If you elect to continue coverage under COBRA, your first premium installment is due within forty-five (45) days of the date you elect continuation coverage. Subsequent installments are subject to a grace period of either thirty (30) days after the premium due date, or the grace period the insurance carrier extends to the employer.