You are here:

Archive for the ‘COBRA Insurance Laws’ Category

Ten Essential COBRA Questions

Posted on: November 5th, 2012 by Kristen Marie

looking at an insuranc policy

Understanding COBRA insurance is important for anyone whether they are employed, unemployed, insured, or uninsured. Knowing your options and the basics will ensure you are prepared in case you find yourself in a situation in the future where you have to make difficult decisions about health care and COBRA.

What is COBRA

COBRA, short for Consolidated Omnibus Budget Reconciliation Act, is a law that was passed in 1986 to let people continue to use their health insurance plan after job loss. Under this law, employees who meet the criteria for enrollment can continue to use the exact same health insurance plan they had when they were employed. In most cases it lasts for 18 months and will cost 102% of the whole premium. Additionally the benefits extend to children, spouses, and any other dependents.

Who can use COBRA

Under the law there are three conditions that must be met in order to use COBRA. First the health plan that the employee was on must cover at least 20 full time employees (or their part time equivalents) and must still be active. Secondly, the employee must have lost their insurance due to involuntary or voluntary job loss without gross misconduct. This could include quitting, being laid off, or even retiring. Finally, the person signing up for COBRA must be an eligible beneficiary which could include dependents and spouses. Additionally children and spouses can qualify for COBRA in the event of divorce, death, Medicare qualification, and loss of dependent status.

How many months can I use COBRA

In most cases COBRA insurance can be used for 18 months and it starts on the day you would have lost coverage. In some cases, COBRA can be extended to 36 months if you have a disability or second qualifying event. Additionally children and spouses can use COBRA for 36 months in the event of death, divorce, loss of dependent status, and Medicare qualification.

What happens to my insurance if I get divorced?

In most cases, as long as your spouse’s plan meets the qualifying requirement, then in the event of divorce you will qualify for COBRA for up to 36 months. It is your responsibility to inform the health insurance provider and sign up for COBRA. Failure to do this right away can result in not being eligible for benefits. In most states you are also eligible for COBRA in the event of legal separation.

How much is COBRA

Under the law COBRA insurance costs 102% of the premium. This includes the entire premium – both what you paid and what your employer paid – plus a 2% administration fee. You can usually find this amount listed on the COBRA enrollment paperwork or you can calculate it yourself.

Do my children get to use COBRA

As long as the covered employee qualifies based on the plan type, then children are eligible as well for COBRA coverage. The law and benefits extend to the entire family. If you learn you are not eligible for COBRA, then you can look into state CHIP plans that may cover your children.

What can I do if I can’t afford COBRA?

There are multiple options for people who can’t afford COBRA and the best option for you will depend on your health status, age, and personal situation. The most common options that people consider are private insurance plans, government or community insurance plans, and finding a trade/alumni insurance plan. Private plans can usually save people up to 65% on the monthly cost and actually offer very similar coverage to COBRA.

Where do I sign up for COBRA?

Signing up for COBRA is a relatively easy process. To sign up you will need to get the COBRA election form form your former employer and complete it by the due date on the form. You will also need to pay the premium to start the insurance. It is retroactive back to the day your coverage was lost and will cover any expenses incurred during that time.

How will my coverage change with COBRA?

Your coverage will not change at all with COBRA because you are keeping the exact same plan. In some instances if the company you worked for changes aspects of their plan, then your plan will also change just like it would if you were still employed.

Can I use COBRA if I quit?

Yes. COBRA insurance works for voluntary and involuntary job loss which includes when someone quits their job. Many people are unaware of this option and miss out on potentially using COBRA for their health plan.

What is the COBRA Insurance phone number?

Posted on: September 27th, 2012 by Kristen Marie

medical equipment

You have questions about COBRA and want to talk to someone about them. It’s a pretty common situation for people looking at COBRA coverage but it can be surprisingly difficult to know where to call and who to contact for COBRA. Here is a quick guide about who to contact and how to contact them when you have questions about COBRA that you need to get answered. Additionally you can take a look at our frequently asked COBRA questions.

Questions About Eligibility

When you have questions about whether or not you are eligible for COBRA the first place should you call is your former employer They have an obligation under the law to inform you of your COBRA rights both when you start working and after you have lost your job. If you are not able to find the answers you want after speaking to your former employer, the next place to call is the health insurance plan provider. They should also be able to inform you if you are eligible. Finally if all else fails you can contact the Department of Labor at 1-866-487-2365.

Questions About Coverage

When you have questions about your coverage including what services you can use and what different services of health care visits will cost you should contact your health insurance company. They will be able to tell you exactly what is included and how much it costs. They can also help you determine which doctors and hospitals you can visit with COBRA. Remember COBRA is just an extension of your old plan so everything will stay the same.

Questions About COBRA Laws

If you have questions about the actual law for COBRA the best place to look is either at our COBRA law page or to contact the Department of Labor, who oversees the law in the federal government. In many cases you can find all the information you need about the law online, but if not try calling the Department of Labor hotline at 1-866-487-2365.

Employer Failed to Fulfill Their Responsibility

If you believe that your employer has not fulfilled their legal obligations under the law, this is a very serious issue that carries very serious fines. In fact employers can be fined up to $110 per employee daily from the IRS and also incur hefty fines from other agencies. You should immediately contact the Department of Labor in this situation so that they can assist you right away.

COBRA Insurance Rules

Posted on: September 26th, 2012 by Kristen Marie

doctor writing prescription

Like any other federal law, there are lot of COBRA rules that are important to understand and follow to ensure that you get the coverage you want and are able to keep it. Failure to follow the rules for COBRA can result in you losing your coverage or not being able to sign up at all. Additionally family members and other beneficiaries may miss out if they are unaware of when they need to notify insurance companies and workplaces of their wishes. Make sure to follow these rules when even considering COBRA health insurance.

Rules for Signing Up

There are certain rules that both the employer and employee must follow in order to sign up for COBRA health and make sure they get the coverage they want.

  • The employer must notify the employee of their COBRA rights when they first become employed
  • The employer has 14 days to notify the employee and their beneficiaries of their eligibility
  • The employee and beneficiaries have 60 days from the date on the notice to sign up for COBRA
  • COBRA is retroactive back to the day coverage was lost if someone signs up
  • In the event of divorce, death, Medicaid qualification, or loss of dependent status it is the responsibility of the beneficiary to inform the workplace and insurance company of their intention to sign up for COBRA

Rules About Cost

The federal government also set very specific rules about the cost of COBRA that anyone on the federal plan must follow in order to be in compliance.

  • COBRA will cost 102% of the full premium
  • Employers are not required by law to subsidize any part of the COBRA expense
  • Insurance companies may cancel your COBRA coverage if you fail to pay your premium on time

Rules About Changes to Plans

Many people want to know what happens to their plan when the company changes the plan or even goes out of business. Here are the most common COBRA rules regarding changes to health plans.

  • If the company goes out of business or stops offering health insurance plan, your COBRA coverage will end
  • If the company changes insurance providers, you will have the same option to switch to the new provider as you would if you were still employed. Make sure to closely look at any changes in coverage and cost before just enrolling in the new plan
  • Open enrollment works the same with COBRA as it did while you were employed. Always plan carefully around open enrollment since COBRA only lasts for 18 months.
  • If the employer decides to increase the cost of the health plan, the same price increases will be passed onto your COBRA coverage.
  • Any changes to the cost of co-payments, deductibles, hospital charges, co-insurance, etc. will also affect your plan

Anytime you are unsure of the COBRA rules the best thing to always do is to call your health insurance provider or the Human Assets department at your former company. Additionally our questions and answers about COBRA can help you find information you are looking for about COBRA coverage, eligibility, and more.

Filing a COBRA Insurance Claim

Posted on: September 13th, 2012 by Kristen Marie

Filing a claim for COBRA health insurance benefits can feel intimidating the first time you do it, but since it is just a continuation of the insurance plan you had, all you have to do is follow the same procedure as when you were employed. For most insurers this will include saving a receipt, filling out a written insurance claim form, and mailing the form and receipt into the insurance company. Reimbursements usually take 4-8 weeks for processing.

If you waited to sign up for COBRA insurance until the end of the sixty days window for enrollment and incurred medical expenses during that time, you can also submit reimbursements and claims to your COBRA administrator because COBRA is retroactive. Since COBRA is retroactive back to the date you lost coverage, everything is covered during that 60 days. Follow the procedure in the Plan Summary Guide from your insurer to submit a claim correctly.

If you want to make a claim against your employer for failing to send you an enrollment form or making another mistake with you COBRA coverage, you can contact the Department of Labor who oversees all issues with the COBRA law, or Consolidated Omnibus Budget Reconciliation Act.

Can I Use Both Medicare and COBRA?

Posted on: September 10th, 2012 by Kristen Marie

doctor and elder patientDue to the difference between Medicare coverage and COBRA coverage, many people want to know whether or not they are able to use COBRA and Medicare at the same time.  And the answer isn’t that simple unfortunately.  It depends on both why you qualified for Medicare and when you enrolled in COBRA coverage.

For people who qualify for Medicare coverage because of their age or a disability, being able to use both plans will be based on when you enrolled in COBRA and which plan you had first.

  • For people who were on COBRA insurance plans before they enrolled in Medicare, in most situations COBRA ends when you start Medicare.  If you already have COBRA when you enroll in Medicare, your COBRA coverage usually ends on the date you enroll in Medicare. However, if you are already on COBRA and become eligible for Medicare, it is always smart to enroll in Medicare Part B right away.  This is because there is no special enrollment period when your COBRA coverage comes to an end.  Any dependents or spouses on COBRA will be able to use it for up to 36 months due to your Medicare qualification.
  • If there are certain things that your Medicare plan does not cover, but your COBRA plan does cover, you may be able to keep a portion of your COBRA plan.  A common example of this is when someone has dental insurance through COBRA but Medicare doesn’t have the same dental offering.  Many plans will allow you to only keep the dental part with COBRA.  To find out if you are eligible, you should contact your health insurance administrator.
  • For people who are already on Medicare and then lose their job (or have another qualifying event) and become eligible for COBRA coverage, you are allowed to sign up for COBRA.  This right is part of ESRD, and in this situation Medicare will be the first plan to pay for any services and then COBRA will pay after that.  The reason to take COBRA in this situation would be due to high medical costs that Medicare doesn’t cover but your COBRA plan would.

Additionally it is important to understand that people who are eligible for Medicare (due to ERSD), have a 30 month coordination period when the employer’s group health insurance plan pays first and then Medicare pays second.  For people enrolled in COBRA during this 30 months window, COBRA health insurance will be the primary insurer.  When COBRA ends, which is likely to happen within that period, Medicare will then take over.  If your COBRA coverage does not end in the 30 months for some reason, then the positions will simply swap and Medicare will become the primary insurer.

COBRA Termination

Posted on: August 6th, 2012 by Kristen Marie

Many people want to know what events can trigger COBRA insurance termination, or in other words, can end your coverage with coverage.  There are many events that can trigger COBRA coming to an end, but these are the most common.

  • Failure to Pay Premiums:  Unfortunately the most common reason that COBRA is terminated is when someone fails to pay their premiums.  Under the law, your coverage can be terminated if a premium payment isn’t received on time.  If you find yourself in a situation where you can not pay, it is extremely important to reach out to the company beforehand and try to work something out.  Otherwise you may find yourself without COBRA coverage.
  • Group Health Insurance Plan Ends:  If for any reason the group health insurance plan ends at your former place of business, then COBRA also ends.  The group plan must be active for you to use it with COBRA.  That means that if your previous company stops offering a health plan, you also lose coverage.
  • Company Goes Out of Business:  When a company goes out of business, the health insurance plan is no longer active and that means it can not be continued with COBRA.  The coverage will be terminated and you will need to seek out alternate insurance.
  • COBRA Period Ends:  At the end of the COBRA term, normally 18 months, the coverage will be terminated.  In most circumstances unless there is another triggering event, you can not extend coverage beyond the time period.
  • Qualification for Medicare: When you qualify for Medicare you are no longer eligible for COBRA in most circumstances.  You will need to change coverage to Medicare instead of COBRA.  However family members can stay on COBRA and in fact may even be able to extend coverage due to the second qualifying event.
  • Qualification for New Insurance Plan:  If you get a new job and become eligible for a new plan, you can no longer use your COBRA coverage.  However you can continue to use COBRA if there is a waiting period to sign up for the new plan.

What Are My Options if COBRA Insurance is Terminated?

The main option you will have if COBRA is terminated and you are not employed is to seek out a private health insurance plan or a government health insurance plan.  Private plans are the most common.  You can learn more about other options here or by getting a free health insurance quote.

Instant Quote Online

Did you know? You can save up to 65% by comparing Insurance alternatives.

* Free quote. No obligation. Learn More

Find COBRA Insurance information in your state.