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How It Works Simplifying the complexities of C.O.B.R.A.
What is COBRA?
COBRA is a Federal law which protects employees' rights to coverage when a qualifying event occurs. COBRA allows employees to continue group health benefits through there employer even after the employee no longer works for the company.
Qualified Beneficiaries (QBs)
A qualified beneficiary is the individual who is eligible for continuation coverage under COBRA due to the qualifying event. These may include the employee, spouse, domestic partners, children of employees, and in some cases other family members. All QBs have their own individual right to elect COBRA coverage when a qualifying event occurs.
What Happens when a Qualifying Event Occurs?
When a qualifying event occurs, the plan terminates coverage as of the last day that the qualified beneficiary is eligible. This is most commonly the day after the event or the last day of the month during which the event occurs. When this happens, a COBRA Notice (aka Notice of Right To Elect) is issued to the qualified beneficiary advising of the opportunity to enroll and relevant coverage information, premium payment information, and instructions on how to enroll. This notice should include an election agreement which serves as the enrollment form. Note that the QBs are typically only eligible to continue the same plans that they had at the time of the qualifying event. New or different plans may not be elected except during annual open enrollment.
When your election agreement and initial premium have been processed by CobraHelp, the insurance carrier(s) will be notified to reinstate your benefits. You may continue to use the same insurance cards that you had prior as the benefits are not changing. The enrollment process varies from insurance carrier to insurance carrier, so the timing of this will vary as well. Some enrollments can be processed immediately, while others often take up to ten business days. Because Cobra Help is not the carrier, in order to find out about the status of your enrollment, you may contact your insurance carrier directly and speak with the eligibility department. If you need help, call us.
When COBRA Coverage Ends
Qualified Beneficiaries are typically eligible for 18 or 36 months of COBRA continuation coverage. This allotted eligibility period is determined by COBRA law and based on the type of qualifying event that the QB experienced....
Termination of Employment - 18 months
Reduction in Hours - 18 months
Dependent Losing Coverage - 36 months
Divorce/Legal Separation - 36 months
Medicare Entitlement - 36 months
Death of Employee - 36 months
Medicare and COBRA
When a qualified beneficiary is on COBRA and becomes entitled to Medicare, he or she would then drop continuation coverage under COBRA and enroll into the Medicare option. COBRA may only be continued in conjunction with Medicare if the employee was enrolled in Medicare prior to his or her COBRA qualifying event. If the latter applies, then the qualified beneficiary may enroll in COBRA continuation as a supplement to Medicare.
In order for a Medicare qualifying event to occur, the spouse of the entitled employee must lose coverage as a direct result of the employees' enrollment into Medicare. This can happen in line with retirement or termination of employment when the beneficiary's Medicare entitlement is in line with the last month of employment. A true Medicare related COBRA qualifying event would allow the spouse of the employee to be eligible for COBRA benefits for 36 months.
Get Help with COBRA
If you have questions regarding COBRA enrollment, eligibility, premium payments or extensions of COBRA, please know that we are here to help. You can review all of the COBRA information, FAQs, and resources online or contact Cobra Help toll free at 866.946.5181 or e-mail us at firstname.lastname@example.org.
Qualifying Events (QEs)
There are several types of qualifying events that allow a person to become eligible for COBRA coverage. These are:
Voluntary or Involuntary Termination of Employment (including retirement and layoffs)
Reduction in Working Hours (when an employee goes from full time to part time employment)
Medicare entitlement (may result in the loss of employee coverage therefore allowing the employee to be offered COBRA due to the Medicare event)
Divorce/Legal Separation (the former spouse or domestic partner to continue coverage)
Death of the Employee (the covered dependents may continue coverage)
Dependent Ceases to Be Covered (when a dependent ages out of the plan at 26 years old or for other reasons is no longer eligible to be covered as a dependent of the employee)
How To Elect COBRA
Upon receipt of a COBRA Notice of Right to Elect, the qualified beneficiaries should decide what coverage to elect to continue, read the notice carefully, and follow the instructions listed in the notice regarding the election agreement and process. The election time frame allotted is 60 days. The election agreement must be completed and returned to Cobra Help within 60 days of the notification in order for the qualified beneficiary to be eligible for continuation coverage. In addition, the initial premium payment is what causes the coverage to reactivate. Coverage may remain cancelled until the initial premium payment is paid. This should be paid within 45 days of the election date. If the full monthly initial payment is not received timely, the qualified beneficiary will lose his right to COBRA coverage.
Paying for COBRA
Your initial premium payment is due within 45 days of the election date. All subsequent monthly COBRA premiums are due the first day of the coverage period requested with a 31 day grace period. For example, a premium due the 1st of the month will have a grace period ending the 1st of the following month. Premiums may be paid to CobraHelp via check, money order or you can setup automatic bill pay with your banking institution. You are responsible for paying monthly COBRA premiums even if you do not receive a bill. However, a monthly bill is issued to participants indicating amount due and due date. Participants may access their billing statements and payment history online at any time via our secure website. If you lose your bill we encourage you to login to your account online or contact us. Failure to remit timely premium will result in the loss of your coverage. COBRA law allows administrators to end coverage if premiums are not paid within a designated time-frame.
How to Extend COBRA Coverage
The absolute maximum allowable time a person can have on COBRA coverage is 36 months. The following are reasons that COBRA may be extended beyond 18 month events for up to 36 months.
New York health plans may be required to extend coverage an additional 18 months, totaling 36 months of continuation coverage. If you are eligible for this extension of COBRA benefits, you will only be able to extend medical coverage, not dental and vision.
Connecticut health plans may be required to extend coverage an additional 11 months, totaling 30 months of continuation coverage. If you are eligible for this extension of COBRA benefits, you will only be able to extend medical coverage, not dental and vision.
Texas health plans may be required to extend coverage an additional 6 months, totaling 24 months of continuation coverage. If you are eligible for this extension of COBRA benefits, you will only be able to extend medical coverage, not dental and vision.
Social Security Disability Extension of COBRA benefits may be available to you if you meet certain criteria and report your approved disability from the Social Security Administration timely. This extends COBRA from 18 months to 29 months, a total of 11 months extended coverage.
Second or Subsequent Qualifying Events may result in coverage extending beyond the original 18 months for certain qualified beneficiaries. Example: In March, a family of four enrolled in COBRA coverage due to a termination of employment. In July, their eldest son ages out of the plan on his 26th birthday. The eldest son now experiences a second qualifying event as of his 26th birthday, allowing him to elect COBRA for a maximum of 36 months from the original termination of employment event date.