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COBRA Health Insurance Rights: Coverage and Eligibility

The Employee Retirement Income Security Act (ERISA), which regulates employee benefit plans, includes the Consolidated Omnibus Budget Reconciliation Act (COBRA). Under COBRA, health insurance coverage offered by employers must be extended to employees who are laid off or experience some other change in employment. The employee is generally responsible for the entire (unsubsidized) cost of the plan, while those terminated for gross misconduct are not eligible for COBRA benefits.

COBRA Health Insurance Benefits

COBRA entitles you to coverage identical to that available to other employees who are currently covered under the plan. However, COBRA health insurance coverage is often more expensive because you're responsible for the entire cost. COBRA coverage typically lasts between 18 and 36 months, depending on the qualifying event. However, your plan can provide for longer periods of coverage. You may be eligible to extend your coverage if another qualifying event occurs, or if a family member qualifies as disabled.

COBRA Eligibility

If you've lost your job but don't want to lose your health insurance plan, you'll want to learn about your coverage rights under COBRA. In order to be eligible for COBRA health insurance benefits, you must meet the following criteria:

1. Benefits Must be Subject to ERISA

First, to be eligible for COBRA your benefits must be subject to ERISA. Generally, all group health plans maintained by private sector employers with 20 or more employees are subject to ERISA and required to offer COBRA coverage. Your plan administrator must provide you with notices detailing your COBRA rights within the first 90 days of coverage.

2. You Must Be a Qualified Beneficiary

Second, you must qualify as a beneficiary. A qualified beneficiary is an individual covered by a group health plan on the day before the event occurs that causes the person to lose coverage. For example, if you were laid off from your job, you must have been covered by your group health plan the day before the day you were laid off to claim COBRA benefits. You're also a qualified beneficiary if you are the spouse, former spouse, or dependent child of the COBRA beneficiary.

3. Loss of Coverage Must be a Qualifying Event

Third, the event that caused you to lose health coverage must qualify for COBRA. If you were terminated from your job for any reason other than gross misconduct, or if your number of working hours was reduced, you (and your spouse and dependent children) qualify for continuation coverage. If the qualifying event was the reduction in your work hours, you can only receive 18 months of COBRA unless you qualify for Medicare.

Beneficiary Spouse

Additionally, if you’re a beneficiary spouse -- meaning you are married to the person entitled to the insurance benefits -- you can typically receive coverage if:

  • Your covered spouse has become entitled to Medicare;
  • You're divorced or legally separated from the covered spouse, or
  • The covered spouse has died.

Beneficiary dependant children are eligible if their parent is eligible, unless they lose dependant status under the plan rules.

How to Claim COBRA Health Insurance Benefits

To claim COBRA 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 occurred 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 receives notice that you have experienced a qualifying event, it must provide you with an election notice within 14 days. This describes your rights to continuation coverage and explains how you make an election. Once you’ve received the notice, you have 60 days to decide. But if the date you would lose your health coverage is later than the date you received 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 be terminated 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; or
  • You engage in conduct that justifies terminating your coverage (i.e. fraud

Protect Your COBRA Health Insurance Rights: Contact an Attorney

Health insurance coverage is literally a matter of life and death, but coverage is not guaranteed in the United States. However, you may qualify for an extension of benefits through COBRA. A qualified local health care law attorney who handles ERISA matters can help you sort through the facts of your situation and determine how best to proceed.

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