If you've been let go from your job or if you've gone through a divorce or the death of loved one, you may be entitled to continued health insurance coverage through COBRA insurance. Get your answers to the COBRA FAQ.
- What is COBRA?
COBRA insurance is a federal law that allows covered employees and their qualified beneficiaries to receive continued group health insurance benefits after the loss of employment of the covered employee in qualifying events. - What is a Qualifying Event?
There are four main qualifying events that allow covered employees and their beneficiaries to receive continued health insurance under COBRA. In the event of the death of a covered employee, qualified beneficiaries can get up to 36 months of continued coverage. In the event of a divorce or legal separation, the same amount of time applies for the ex-spouse of the covered employee. In the event that a covered employee is terminated for a reason other than a gross misconduct, or if their hours are reduced, the covered employee and the qualified beneficiaries can receive up to 18 months of continued coverage. - Who is a Qualified Beneficiary?
Generally speaking, a qualified beneficiary is a legal spouse of a dependent child of a covered employee. This includes adopted children and newborns. As long as the newborn or adopted child is enrolled within 30 days of the birth or adoption, they will be covered. - Who Pays for COBRA Insurance?
The downside to COBRA insurance is that the employer is no longer responsible for paying the insurance premium. In most cases, you are the one who pays the premium. Insurance companies can charge you up to 102% of the premium, which in effect means you can be financially penalized for using COBRA. - How Will I Know if I Qualify for COBRA?
The plan administrator at your work place, usually your HR professional, has to issue a qualifying notice to each qualified beneficiary. This will include a cover letter that explains COBRA, with details about election notices and payment schedules. After you receive a qualifying notice, you will need to notify the plan administrator of your election to use COBRA benefits within 60 days of the qualified (triggering) event. - What Kinds of Plans do not Apply to COBRA?
Small employers (20 people or less) are entirely exempt from federal COBRA laws, although some states may have laws that apply to small employers. The federal government does not fall under COBRA, but it has a separate law, the Federal Employees Health Benefits Amendments Act of 1988, requires that they provide continued coverage. - Do I Have Other Options Other Than COBRA?
Yes, now that the Affordable Care Act is in place, qualified beneficiaries have other options outside of COBRA. You can explore your options through the federal health insurance marketplace. You won’t have the same plan as you had before, but you may have more cost effective options through the marketplace than you had before.
