Consolidated Omnibus Budget Reconciliation Act of 1985, allows you to continue
your health insurance in situations where coverage may have been lost due to
certain qualifying events, i.e. the loss of employment (unless due to gross
misconduct), divorce, death of a spouse or because a dependent child has
reached the age of attainment. You are guaranteed the right to continue your
existing group coverage provided that:
employer has more than 20 employees.
were covered under the existing health plan.
have one of the qualifying events.
are able to pay the full cost of the premium yourself.
COBRA coverage is
expensive since your employer will no longer be contributing toward the cost of
your health insurance. Be prepared to pay 102% of the cost of the plan. The
extra 2% is for administration fees. If you extend your COBRA coverage because
of a disability, your premium will increase to 150% of cost.
Enroll in COBRA
are two very important reasons why, in spite of the cost, you may want to
consider Cobra as a way to bridge the gap until you have other coverage:
cost to treat even a minor illness or injury is very expensive, it is important
that you always have some type of health insurance that can help offset the
cost of needed care.
order not to be subject to a preexisting period, one must not lose coverage for
more than 63 days. COBRA allows you to bridge the period from when you lose
coverage to when you enroll in a new plan.
of job or reduction in hours would entitle you and your eligible
dependents to COBRA coverage for 18 months.
legal separation, death of the employee or if you are covered under
Medicare would entitle your spouse and eligible dependents up to 36 months
in COBRA coverage.
of dependent child status would entitle the child up to 36 months of COBRA
on disability and eligible for SSI would be entitled to COBRA coverage for
up to 29 months.
employer has 30 days to notify the plan holder of a qualifying event.
plan holder has 14 days to get your COBRA information and enrollment
materials out to you.
or your dependents have 60 days to elect COBRA.
have 45 days to pay the first premium.
Will Coverage Terminate
you stop paying the premiums.
you move out of the coverage area.
coverage period has run out.
become covered under another group plan.
become eligible for Medicare.
Facts about COBRA
is not available for individual plans; it applies to group plans only.
plans must also offer COBRA coverage.
does not extend your life insurance.
employer, nor the insurance carrier, is required to send you monthly
premium statements. It is up to you to get the correct cost of your premium
in on time.
the employer is hit with a rate increase, your premiums can increase as
COBRA coverage must be identical to the coverage you had before.
You are allowed to drop incidental
coverages like vision or dental plans.