Who is entitled to benefits under Cobra?
COBRA – the Consolidated Omnibus Budget Reconciliation Act – requires group health plans to offer continuation coverage to covered employees, former employees, spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain events.
Which benefits are Cobra covered?
- Your spouse dies;
- Your spouse’s hours of employment are reduced;
- Your spouse’s employment ends for any reason other than his or her gross misconduct;
- Your spouse becomes entitled to Medicare benefits (under Part A, Part B, or both); or
- You become divorced or legally separated from your spouse.
What benefits does Cobra cover?
- COBRA lets you extend your former employer's health plan.
- COBRA requires you to pay 100% of the health insurance costs plus up to 2% adminstrative fee.
- You have 60 days to decide whether to sign up for COBRA. Remember, if you sign up on day 59, you will have to pay retroactive premiums.
How to extend COBRA benefits?
- If the plan is a multiemployer plan, the multiemployer plan itself.
- If the plan is fully or partially self-insured, to the employer that sponsors the plan (including state and local governmental employers).
- If the plan is not described above, to the insurance company
How long does Cobra coverage last?
Primarily relevant here, the COBRA Law requires an employer to offer continuation of coverage for 18 months when coverage is lost due to a covered employee’s reduction in work hours or termination of employment (other than on account of gross misconduct).
When does the free COBRA coverage end?
Section 9501 of the American Rescue Plan Act of 2021 (the “ARPA”) [1] requires employers to extend offers of free COBRA coverage to certain individuals for the period from April 1, 2021 through September 30, 2021. The ARPA then provides tax credits as means of offsetting the costs of the free COBRA coverage.
How long does a beneficiary have to notify the DOL of free Cobra coverage?
If a qualified beneficiary does elect free COBRA coverage, the plan administrator is required to notify the individual 15 – 45 days before the free COBRA coverage will expire. Again, the DOL is supposed to provide a model notice.
What is the Cobra law?
The “COBRA Law” [2] is a federal law that generally obligates employers with group health plans to offer covered employees and covered dependents (“COBRA qualified beneficiaries”) the right to continue coverage under the group health plan in certain circumstances where the coverage otherwise would cease.
When does Cobra stop?
The offer of free COBRA coverage will cease if an individual becomes eligible for other group health plan coverage or Medicare. Thus, free COBRA coverage must be offered on a prospective basis for losses of coverage that occur from April 1, 2021 through September 30, 2021, on account of a covered employee’s reduction in work hours or termination ...
When will Cobra be available in 2021?
Qualified beneficiaries who are enrolled for COBRA coverage as of April 1, 2021, on account of a covered employee’s prior reduction in hours or termination of employment (other than voluntary) and prior election of COBRA coverage.
When will Cobra be discontinued?
An individual who was previously covered under the group health plan via a valid COBRA election of coverage, but subsequently had that coverage discontinued before April 1, 2021. The law is unclear in these two situations whether an offer of free COBRA coverage must be made.
How long is Cobra coverage?
In certain circumstances, if a disabled individual and non-disabled family members are qualified beneficiaries, they are eligible for up to an 11-month extension of COBRA continuation coverage, for a total of 29 months. The criteria for this 11-month disability extension is a complex area of COBRA law. We provide general information below, but if you have any questions regarding your disability and public sector COBRA, we encourage you to email us at [email protected].
What is the cobra?
The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) amended the Public Health Service Act, the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA) to require employers with 20 or more employees to provide temporary continuation of group health coverage in certain situations where it would otherwise be terminated.
What is a Cobra notice?
A notice of COBRA rights generally includes the following information: A written explanation of the procedures for electing COBRA, The date by which the election must be made, How to notify the plan administrator of the election, The date COBRA coverage will begin, The maximum period of continuation coverage, The monthly premium amount,
How long does it take to get a Cobra notice?
Separate requirements apply to the employer and the group health plan administrator. An employer that is subject to COBRA requirements is required to notify its group health plan administrator within 30 days after an employee’s employment is terminated, or employment hours are reduced. Within 14 days of that notification, the plan administrator is required to notify the individual of his or her COBRA rights. If the employer also is the plan administrator and issues COBRA notices directly, the employer has the entire 44-day period in which to issue a COBRA election notice.
How long do you have to notify Cobra?
Qualified beneficiaries must be given an election period of at least 60 days during which each qualified beneficiary may choose whether to elect COBRA coverage.
What is the COBRA requirement?
Title XXII of the Public Health Service (PHS) Act, 42 U.S.C. §§ 300bb-1 through 300bb-8, applies COBRA requirements to group health plans that are sponsored by state or local government employers. It is sometimes referred to as “public sector” COBRA to distinguish it from the ERISA and Internal Revenue Code requirements ...
How long does an employer have to issue a Cobra election notice?
If the employer also is the plan administrator and issues COBRA notices directly, the employer has the entire 44-day period in which to issue a COBRA election notice.
How long does Cobra coverage last?
COBRA coverage can be extended from 18 to 29 months if the qualifying event is the employee's termination, quitting, or reduction in hours, and the beneficiary either has a disability at the time of the qualifying event or becomes disabled during the first 60 days of COBRA coverage.
How long does Cobra last?
If the qualifying event is the employee's quitting, termination, or reduction in hours, COBRA benefits last for 18 months. If the qualifying event is the employee's death, the employee's divorce or legal separation, or the dependent's loss of dependent status under the plan, COBRA benefits last for 36 months.
How long can you keep your health insurance after a qualifying event?
Employees, and their spouses and dependents, can continue their group health insurance coverage for 18 to 36 months after a qualifying event. Please answer a few questions to help us match you with attorneys in your area.
Does Cobra pay for insurance?
An employee (or spouse or dependent) who continues benefits through COBRA must pay the full cost of coverage. However, because employers typically negotiate lower group insurance rates, this amount is almost always less than it would cost to purchase an individual insurance policy.
Can you continue your health insurance after you get laid off?
Under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), employees -- and their spouses and dependents -- can continue their group health insurance coverage after an occurrence that would otherwise terminate coverage, such as the employee getting laid off or the employee's spouse getting divorced.
Can an employee's spouse continue to be covered by Medicare?
In addition, spouses and dependents can continue coverage after the employee dies, the employee and spouse divorce or legally separate, the employee becomes eligible for Medicare, or the dependent loses dependent status under the plan. ...
How long can a spouse continue Cobra?
A covered employee's spouse who would lose coverage due to a divorce may elect continuation coverage under the plan for a maximum of 36 months. A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation. After being notified of a divorce, the plan administrator must give notice, generally within 14 days, to the qualified beneficiary of the right to elect COBRA continuation coverage.
What is the law for cobra?
The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees, or by state or local governments. The law does not apply to plans sponsored by the Federal Government or by churches and certain church-related organizations. In addition, many states have laws similar to COBRA, including those that apply to health insurers of employers with less than 20 employees (sometimes called mini-COBRA). Check with your state insurance commissioner's office to see if such coverage is available to you.
What is continuation coverage?
If you elect continuation coverage, the coverage you are given must be identical to the coverage currently available under the plan to similarly situated active employees and their families (generally, this is the same coverage that you had immediately before the qualifying event). You will also be entitled, while receiving continuation coverage, to the same benefits, choices, and services that a similarly situated participant or beneficiary is currently receiving under the plan, such as the right during open enrollment season to choose among available coverage options. You will also be subject to the same rules and limits that would apply to a similarly situated participant or beneficiary, such as co-payment requirements, deductibles, and coverage limits. The plan's rules for filing benefit claims and appealing any claims denials also apply.
How long do you have to elect Cobra?
If you are entitled to elect COBRA coverage, you must be given an election period of at least 60 days (starting on the later of the date you are furnished the election notice or the date you would lose coverage) to choose whether or not to elect continuation coverage.
Can you use the Health Coverage Tax Credit for Cobra?
The Health Coverage Tax Credit (HCTC), while available, may be used to pay for specified types of health insurance coverage ( including COBRA continuation coverage).
Can you extend your 18 month coverage?
If you are entitled to an 18 month maximum period of continuation coverage, you may become eligible for an extension of the maximum time period in two circumstances. The first is when a qualified beneficiary is disabled; the second is when a second qualifying event occurs.
Can you revoke Cobra coverage?
Then, the plan need only provide continuation coverage beginning on the date you revoke the waiver.
How long does it take to pay Cobra premiums?
COBRA Premium Payments. Plans are required to allow premium payments in monthly installments and cannot require a payment before 45 days after the day of initial COBRA election. Failure to pay on time can result in coverage termination for the beneficiary.
How long do you have to elect Cobra?
Under COBRA continuation law, once a beneficiary has a qualified event (loss of job, reduction in hours, death of covered employee, etc.), they have 60 days to choose whether or not to elect COBRA coverage.
How long does it take to notify Cobra?
COBRA Notifications. Once a beneficiary has a qualifying event, the employer must notify the plan administrator within 30 days of the event. Within 14 days of getting the employer’s notice, the COBRA administrator must send a COBRA election notice to the beneficiary.
Table of Contents
Background
- This section provides information about COBRA continuation coverage requirements that apply to state and local government employers that maintain group health plan coverage for their employees. Group health plan coverage for state and local government employees is sometimes referred to as “public sector” COBRA to distinguish it from the requirements that apply to private …
Premium Assistance
- In General.Despite the fact that COBRA and State "mini-COBRA" laws may make continuation coverage available to employees who lose their jobs, as well as their dependents (qualified beneficiaries), many unemployed individuals and family members cannot afford the cost of the continuation coverage. These individuals may qualify for a subsidy under the American Recover…
Covered Benefits
- Federal COBRA requirements only apply to employment-related group health plan coverage. They do not apply to individual or association health insurance policies, and they do not apply to any non-health benefits through the employer, such as life insurance. Qualified beneficiaries are generally entitled to continue the same coverage they had immediately before the qualifying eve…
Shortened Periods of Coverage
- Continuation coverage generally begins on the date of the qualifying event and ends at the end of the maximum period. However, a period of coverage may end earlier if: 1. an individual does not pay premiums on a timely basis. 2. the employer ceases to maintain any group health plan. 3. after the COBRA election, an individual obtains coverage with another employer group health pla…
Notices Required of Qualified Beneficiaries
- An employee or qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce (or legal separation if that results in loss of plan coverage) or a child's ceasing to be covered as a dependent under the plan's rules. Also, a qualified beneficiary must notify the plan administrator within 60 days of those events when they occur during the initial 1…
Paying For Coverage
- Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. COBRA coverage may be less expensive, though, than individual health coverage. Premiums for COBRA continuation cove…
Other Coverage Considerations
- In deciding whether to elect COBRA continuation coverage, you should consider all your health care options. 1. For instance, one option that may be available is "special enrollment" in a group health plan sponsored by a spouse's employer, if enrollment is requested within 30 days of loss of your health coverage. (If you decide to elect COBRA coverage under your plan, special enrollmen…
Contact Information
- If you are unable to find the COBRA-related information you are looking for on this Website, you may e-mail us at [email protected]. Below are other sources of information about continuation coverage benefits, and subsidies and other rights under ARRA. 1. Centers for Medicare & Medicaid Services (CMS). For assistance with questions regarding premium assistance for conti…
Background
Free Cobra Coverage
- Under Section 9501 of the ARPA, free COBRA coverage must be offered to COBRA qualified beneficiaries who are enrolled for COBRA coverage under a group health plan on April 1, 2021 and thereafter, if coverage under the plan is lost, or previously was lost, due to a covered employee’s: 1. reduction in work hours (e.g., layoff, furlough, etc.), or 2. termination of employment (other tha…
Extensions of Cobra Coverage
- The law provides special COBRA enrollment rights under a group health plan for the following individuals who are not enrolled for COBRA coverage as of April 1, 2021: 1. An individual who previously had the right to elect COBRA coverage on account of a covered employee’s prior reduction in work hours or termination of employment (other than voluntar...
Termination of Employment Issues
- It is not clear whether a mutual termination of employment will or will not be considered “voluntary” under the law. Given that there are tax credits being provided to help offset the employer’s costs, and that an employer can be subject to liability for failure to offer free COBRA coverage, we believe it would be wise for employers to be cautious when determining that an off…
Notice and Election Issues
- Fortunately, the law requires the Department of Labor to issue within 30 days, a model notice for employers to use to advise qualified beneficiaries of their rights under the law. Plan administrators are required to give notices to eligible qualified beneficiaries by not later than May 30, 2021. Once an eligible qualified beneficiary receives a notice, the individual is entitled to a 6…