How Does My Health Plan Know To Offer Me Cobra
If youre eligible for COBRA health insurance, you wont get a COBRA election notice from your health plan if the health plan doesnt know about your life-changing event. Someone has to tell the health plan administrator. This is known as âgiving qualifying event notice.
The employer will tell your health plan if your loss of coverage is due to the termination of the employee, death of the employee, employee Medicare eligibility, or reduction of employee work hours. Its your responsibility to tell your health plan if your loss of coverage is due to divorce, legal separation, or a young-adult losing dependent status under plan rules.
In some cases, you may be tempted to withhold notice. If the employer and health plan dont know youre legally separated, you might think you wont have to pay the COBRA health insurance premiums. Youd just continue on with spousal coverage as though youre a married couple. Think again.
Youre required to give qualifying event notice in a timely manner. Not giving qualifying event notice is a type of fraud youre basically stealing health insurance coverage for which youre no longer eligible. The employer may demand reimbursement for its share of the monthly premiums paid for the coverage you were no longer eligible to receive. The health plan may demand reimbursement for the health care it paid for while you were receiving coverage fraudulently.
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How Long Will My Cobra Coverage Last
Although COBRA is temporary, youll have time to find another plan. Federal coverage lasts 18 months, starting when your previous benefits end. Some states extend medical coverage to 36 months. Check with your benefits manager to find out whether your state extends COBRA benefits.
Some benefits have a lifetime limit, but thats not the case with COBRA. Each time you enroll, youre entitled to the same benefits for the same period of time.
Am I A Qualified Beneficiary
To be considered a qualified beneficiary, you must be insured by the health plan the day before the qualifying event happens. In addition, you must be one of the following:
- An employee of the employer sponsoring the health plan.
- A spouse or ex-spouse of that employee.
- A dependent of that employee.
- An agent, director, or independent contractor that isnt technically an employee, but that participates in the health plan.
- In some cases, you may be eligible if youre a retired employee, retirees spouse, or retirees dependent child and youre losing coverage because your former employer is going bankrupt.
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My Job Situation Has Changed Can I Get Health Insurance Through Cobra
If you lost your coverage through your work, COBRA is one of the coverage options you may consider. There are additional options, such as short term health insurance or Affordable Care Act plans that you may also consider. Learn more about coverage options to consider.
You may qualify for COBRA coverage if your job or life situation has changed. Here are some of the ways you may qualify:
- You lost your job, either voluntarily or by the decision of your company and you have lost your health coverage
- You had the number of hours per week you work reduced so you no longer get benefits and you have lost your health coverage
- You experience a qualifying event, such as the death of the covered employee, a divorce or legal separation from the covered employee or another event that may entitle you to COBRA coverage.
Cobra Benefits And Available Coverage
For qualifying candidates, COBRA rules provide for the offering of coverage that is identical to that which the employer offers to its current employees. Any change in the plan benefits for active employees will also apply to qualified beneficiaries. All qualifying COBRA beneficiaries must be allowed to make the same choices as non-COBRA beneficiaries. Essentially, the insurance coverage for current employees/beneficiaries remains exactly the same for ex-employees/beneficiaries under COBRA. You must be given at least 60 days in which to choose whether or not to elect continuation coverage. Even if you waive coverage, you can change your mind if it is within the 60-day election period.
From the date of the qualifying event, COBRA coverage extends for a limited period of 18 or 36 months, depending upon the applicable scenarios. One can qualify to extend the 18-month maximum period of continuation coverage if any one of the qualified beneficiaries in the family is disabled and meets certain requirements, or if a second qualifying event occurspotentially including the death of a covered employee, the legal separation of a covered employee and spouse, a covered employee becoming entitled to Medicare or a loss of dependent child status under the plan.
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How Long Does The Cobra Coverage Last
The length of time you can keep COBRA coverage depends on your qualifying event . If your major medical coverage ends because your employment ends , or because your hours are reduced, you and your qualified dependents can keep coverage under the employers health insurance for up to 18 months by paying for the full cost of the coverage.
Note that a few states require employers to offer COBRA coverage for a longer time than federal laws do. Again, your state insurance commissioners office can tell you more about this.
How Do I Decide Between Cobra And Other Health Insurance Options
Whether youre trying to choose between health insurance plans or what to eat for dinner tonight, its always good to have plenty of options. And like we said earlier, you do have other options besides COBRA.
If youre still on the hunt for a new job, decide to go into business for yourself, or need insurance to bridge the gap until your health care benefits at your new job kick in, youll probably discover that buying health insurance from the marketplace is less expensive than COBRA.
So how do you decide which health plan is best for you? Here are some things to think about:
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Cost Of Cobra Health Insurance Coverage
COBRA insurance costs a lot more money than you were paying as an active employee with benefits. Because your employer is no longer subsidizing any portion of the plan, you will bear the full brunt of the cost. Not only will you be required to pay 100 percent of the premium, sometimes as much as three times what you paid as an employee, but a 2 percent administrative charge may also be added.
If you believe that you’re going to be losing your coverage, it’s a good idea to talk with someone within the human resources department, or whomever is in charge of your company’s benefits. They can inform you of the full cost of your health insurance coverage, and you can plan for how much more expensive it’s going to be. If you’re unable to get this information from your employer, you can find out on your own.
If you’ve been employed for more than a year by your company, you can look at last year’s W-2 to find out what your employer’s contribution to your health insurance added up to. If you add that number to the amount that you paid in the same period, you can determine what the total cost of your health care coverage was last year. That may change slightly from year to year, but it will give you a rough estimation and possibly an exact dollar amount of what you will be expected to pay.
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How Does Cobra Insurance Work
If you become eligible for a COBRA plan, such as losing your job, the employer will contact the health insurer about the situation within 30 days of your last day.
The health insurance company will then notify you with information about how to sign up for COBRA. That information will include cost estimates, so you understand how much you have to pay to keep the health plan through COBRA.
You can sign up for COBRA coverage or decline coverage. You have 60 days to make that decision.
Once signed up for COBRA, youll use your health insurance plan like you did when employed. However, youll pay all of the costs with no help from your former employer.
You can keep COBRA for at least 18 months. In some cases, you can have a COBRA plan for even longer — up to 36 months — depending on the qualifying event.
At the end of your eligibility period, you need to find another health plan if you want insurance. Check the COBRA coverage alternatives section later on this page for other options.
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Why Are Cobra Insurance Premiums So High
COBRA insurance premiums are high because when you leave a job, you’re no longer part of an employer-sponsored health plan, which means you have to pay the full cost for the coverage. Usually, employers pay a significant portion of an employee’s healthcare premiums.
But even though COBRA premiums may be high, it’s still a good option for people who recently lost their jobs. That’s because COBRA allows you to keep your health insurance coverage for at least 18 months, which can be a big help if you have a pre-existing condition or need to see a specialist.
How Long Does Cobra Continuation Coverage Last
If you like your job-based health plan, you can keep itwell, for a little while at least.
Again, continuation coverage under COBRA is designed to be a temporary extension of the health insurance you had at your old jobthe key word here is temporary. In most cases, COBRA coverage lasts 18 months from the time you choose to sign up for it.
Under special circumstances, you might be able to extend COBRA coverage to 29 or 36 months for you and your dependents.
But beware: If youre late on that first payment, youll lose your right to COBRA coverage, and you wont be able to get it back. The due date for your first payment is defined as 45 days after you elect coverage. If youre late on a monthly payment after that, your coverage will be canceled that day. However, if you make your payment within the 30-day grace period, your COBRA coverage can be reinstated.
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Getting Started On Cobra Insurance
After you leave your job or your work insurance ends, the employer has 45 days to notify you of your option of electing COBRA continuation to maintain your medical coverage. This opens a special open enrollment period for you.
You have 60 days to respond to the election notice and apply for COBRA to continue the same medical policy you are or were on.
How Do You Qualify For Cobra Health Insurance
COBRA health coverage can only be used in certain situations. These situations are sometimes called, qualifying events. How do you know if youâre eligible? COBRA eligibility includes:
As an employee:
- You must have been employed and covered under an employerâs group health plan.
- You must have been laid off, fired, retired, or quit or had your work hours cut to the point that your employer is no longer required to cover you under a group health plan.
As a dependent:
- If you are a dependent of someone who qualifies for COBRA based on the above, you may be eligible, too.
- If you are a spouse who divorces or files for legal separation from the employee, you may qualify.
- A spouse of an employee who dies, may also meet COBRA eligibility.
If you are unsure whether you meet COBRA eligibility requirements, you can contact your employers human resources department. You can also contact the insurance carrier for the health plan.
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Consumer Frequently Asked Questions: Cobra Coverage
Does my employer have to offer me the opportunity to elect continuation of my health insurance coverage?
Answer: In general, most employers with 20 or more employees who provide group health plans must offer each “qualified beneficiary” who would otherwise lose coverage under the plan because of a “qualifying event” an opportunity to elect continuation of the coverage received immediately before the qualifying event.
Who is a qualified beneficiary?
Answer: Generally, a qualified beneficiary is any individual who, on the day before a qualifying event, is covered under a group health plan maintained by the employer of a covered employee by virtue of being: the covered employee, the spouse of the covered employee, or the dependent child of the covered employee. Exceptions include Medicare eligible individuals and certain nonresident aliens.
What is a “qualifying event”?
If I voluntarily leave my employment, is that considered to be a qualifying event?
Answer: Yes. Unless the covered employee was terminated due to gross misconduct, it does not matter whether the employee voluntarily terminated employment or was discharged.
What benefits are available under COBRA?
Answer: If a qualifying event occurs, each qualified beneficiary is entitled to elect to continue to receive coverage identical to that being provided under the plan to “similarly situated beneficiaries” to whom a qualifying event has not occurred.
What is the cost of continuation of coverage under COBRA?
Temporary Health Plans Are An Alternative
One way to reduce the cost of your health insurance is to use a temporary health plan, like Short Term Medical or Accident Only insurance.
This type of insurance can bridge a gap until your next major medical plan begins. This type of health insurance is a popular option and available in most states. You wont find these plans on the federal insurance marketplace. These plans are available on private health insurance marketplaces. Temporary plans do not provide preexisting condition coverage.
If you are unsure who your plan administrator is, reach out to the human resources department of the company that provided the health insurance you had.
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How Is My Cobra Affected If I Left Work Due To A Disability
If you leave work because of a disability, and the Social Security Administration finds you to be disabled and entitled to Social Security Disability Insurance or Supplemental Security Income , you are eligible for an additional 7 months of coverage from the previous maximum of 29 months of Federal COBRA for a total of 36 months. If you are receiving Social Security benefits and are disabled, you should be entitled to Medicare coverage at the end of the 36-month COBRA extension. Note: People who are disabled must notify their COBRA administrator of their determination of disability by SSA within 60 days of the disability determination notice in order to qualify for the 7-month extension.
Whats My Timeline To Choose Whether To Sign Up For Cobra Insurance
You have some time to think about opting into COBRA, but not much.
The clock starts ticking when you lose coverage or hear from your employer. When that happens, you qualify for a special enrollment period and have 60 days to choose COBRA continuation coverage or a marketplace plan. If you say “No thanks!” to COBRA, youll have to choose a marketplace plan.6
If you miss that window and dont sign up for COBRA or a marketplace health plan, youre putting yourself in a dangerous position.
First, once the initial 60 days are up, you wont be able to sign up for COBRA at all. And second, if you didnt sign up for any health insurance plan during that time, you might have to go uninsured until the next open enrollment period. Thats a big risk to take. What if you or someone in your family has a medical emergency and you dont have insurance?
It doesnt matter how young, healthy or wealthy you are. If youre alive and breathing , then you need health insurance. No exceptions! Medical bills are the number one cause of bankruptcies in the U.S.7 Dont roll the dice on your health or your finances. Its just not worth it.
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What Is Cobra Health Insurance
Large employers in the U.S., those with 50 or more full-time workers, are required to provide health insurance to their qualifying employees by paying a part of insurance premiums. If an employee becomes ineligible to receive an employer’s health insurance benefitswhich can happen for a variety of reasons the employer may stop paying its share of the employee’s insurance premiums. In that case, COBRA allows an employee and their dependents to retain the same insurance coverage for a limited period of time, provided they are willing to pay for it on their own.
Under COBRA, former employees, spouses, former spouses, and dependent children must be offered the option of continued health insurance coverage at group rates, which otherwise would be terminated. While these individuals are likely to pay more for health insurance coverage through COBRA than they did as employees , COBRA coverage might be less expensive than an individual insurance plan would be.
It’s important to note that COBRA is a health insurance coverage program and plans may cover costs toward prescription drugs, dental treatments, and vision care. It does not include life insurance and disability insurance.
As part of the American Rescue Plan Act of 2021, the federal government paid COBRA insurance premiums for individuals that lost their job as a result of the 2020 economic crisis from April 1 through Sept. 30, 2021.
Health Insurance Options If Your Employer Closes Due To The Coronavirus Pandemic
The coronavirus global pandemic has left millions out of work and thousands of businesses shuttered. If your employer has closed or stopped offering a health care plan because of the COVID-19 outbreak, you probably won’t be eligible for COBRA continuing coverage. Instead, your best option might be to purchase coverage through your state’s health insurance exchange established by the Affordable Care Act. Losing employer-provided health insurance is one of the “qualifying events” that allows you to enroll in a plan on these exchanges. Find a plan that suits your needs at Healthcare.gov.
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