COBRA Health Insurance Rights: Coverage and Eligibility

Under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), you can't lose your health insurance coverage if you lose your job. COBRA amended the Employee Retirement Income Security Act (ERISA) to ensure anyone who loses their job doesn't lose health insurance. Under COBRA, employers must extend health insurance coverage to employees who experience specific changes in employment.

COBRA Continuation Coverage

Before Congress passed COBRA, if you lost your job, you also lost your health insurance. This was often disastrous for anyone with ongoing or chronic medical conditions, as this loss could complicate their treatment. Many people remained in jobs to protect their access to health insurance coverage. COBRA continuation coverage ensures that the employee and any qualified beneficiaries do not lose their coverage if their employment ends.

COBRA applies to employers with at least 20 employees that sponsor group health insurance plans. The insurance plan administrator must notify employees of their COBRA rights within 90 days of getting health insurance coverage.

Qualified Beneficiaries

Qualified beneficiaries are those covered by the employer's group health insurance plan the day before a qualifying event. The following is a list of potential qualified beneficiaries:

• Employee
• Employee's spouse or former spouse
• Employee's dependent child
• Retired employee
• Retired employee's spouse
• Retired employee's dependent child

Qualifying Events

A qualifying event results in the employee losing their health insurance. Qualifying events differ based on the qualified beneficiary. For example, qualifying events for the covered employee include the following:

• Reduction in work hours
• Voluntary or involuntary termination of employment (exclusive of gross misconduct)

Qualifying events for a spouse or former spouse include those for the covered employee and the following:

• Death of covered employee
• Legal separation of the covered employee
• Covered employee becomes eligible for Medicare
• Qualifying events for a dependent child include those for the covered employee and the following loss of dependent child status under the group health plan rules

COBRA Health Insurance Benefits

COBRA entitles you to coverage identical to active employees covered under the group health plan. So, you should get the same health and prescription drug benefits as active employees covered under the plan. COBRA coverage should not affect the providers you can see or your deductibles.

COBRA premiums are often more expensive than regular health insurance premiums because the beneficiary pays the entire cost of health care coverage. Employers usually cover a percentage of these costs for active employees during employment.

Length of Time for COBRA Continuation Coverage

COBRA coverage typically lasts between 18 and 36 months, depending on the qualifying event. But your group health plan can offer longer periods of coverage. You may extend your coverage if another qualifying event happens or a family member qualifies as disabled.

COBRA Election

To elect continuation coverage, you must notify the plan administrator within the filing period. Your plan can set the time limit for filing, but it must be at least 60 days from whichever of these events happened last:

• The qualifying event
• The loss of your coverage (due to the qualifying event)
• Being informed of your responsibility to notify the plan administrator and provided with the proper procedures

Once the plan gets notice that you have experienced a qualifying event, it must give you an election notice within 14 days. This notice describes your rights to continuation coverage and explains how you make an election. Once you've gotten the notice, you have 60 days to decide. But if the date you would lose your health coverage is later than the date you got the election notice, you have 60 days from the date of your loss of coverage to make your election.

Early Termination of COBRA Coverage

COBRA coverage can end early for any of the following reasons:

• The employer cancels the health plan
• You fail to pay your premiums on time
• You become eligible for Medicare
• You begin coverage under another plan as long as that plan doesn't have restrictions against preexisting conditions
• You engage in conduct that justifies terminating your coverage (i.e., fraud)

Alternative Coverage Options

Since the passage of the Affordable Care Act in 2009 (ACA), you have more coverage options if you lose employer-sponsored health coverage. Losing your job or health insurance are two ways to qualify for special enrollment under the ACA. Special enrollment is outside the annual open enrollment period under the ACA. Typically, you can only enroll in a health insurance plan on the federal health insurance marketplace during this period.

Special Enrollment

Under the ACA, you can qualify for special enrollment if you have experienced any of the following life events:

• Losing health insurance coverage
• Moving
• Marriage
• New baby/child
• Decrease in income

Depending on your group health plan, you should have 60 days before or after you experienced the qualifying event to enroll in a special enrollment period.

Get Legal Help

Many people in the United States depend on employer-sponsored group health plan coverage to care for themselves and their families. If you lose your job or experience a reduction in your work hours, COBRA can help. A health care attorney can help you understand your options under COBRA laws. Speak to an experienced health care law attorney today.