What is it?
The Consolidated Omnibus Budget Reconciliation Act of 1985, more commonly known as COBRA, requires group health plans with 20 or more employees to offer you the opportunity to continue health coverage for you and your dependents for 18 months after you leave your job. Longer durations may be available under certain circumstances. If you elect to continue your coverage under a COBRA extension, you must pay the entire premium plus a two percent (2%) administrative charge. You may elect COBRA by returning the forms you have received from CONEXIS or by logging into our Web site with your secure User ID and Password.
Under COBRA, if you voluntarily resign from a job or are terminated for any reason other than "gross misconduct" you are guaranteed the right to continue your former employer's group plan as either individual or family health coverage. In many cases your spouse and dependent children are also eligible for COBRA coverage, sometimes for as long as three years.
Individual health plans, like those located at www.COBRAOptions.com are true individual policies that you would purchase on your own – not through work or an association – and are NOT subject to COBRA laws, so once you lose that coverage, you will NOT receive an extension under COBRA. Consider your COBRA alternatives wisely... You may wish to consult with a health care professional prior to making your final decision – but remember, you only have sixty (60) days to make your election so don't delay!
COBRA EligibilityIn order to be eligible for COBRA, you must have been covered under your employer's health plan for at least one day to be eligible for COBRA continuation, but in general there are three categories of people (known as beneficiaries) that are eligible for COBRA coverage: (1) employees or former employees, (2) their spouses and (3) their dependent children. There are several types of "Qualifying Events" that may trigger COBRA. Please review the chart below for the maximum coverage periods allowed under COBRA. Remember, your COBRA coverage ends when you are covered by another group health plan and you have satisfied the pre-existing exclusion provision in the new plan (if any). Also, under HIPAA, if you have a break of coverage of more than 63 days you may have to satisfy a pre-existing exclusion under the new group health plan.
COBRA Coverage Periods - Qualifying Event Beneficiary Eligibility for Coverage and Maximum Coverage Time:
- Termination of job - Employee, spouse & dependent child(ren) 18 months
- Reduced hours - Employee, spouse & dependent child(ren) 18 months
- Disability extension - Employee, spouse & dependent child(ren) 29 months
- Employee entitled to Medicare - Spouse & dependent child(ren) 36 months
- Divorce or legal separation - Spouse & dependent child(ren) 36 months
- Death of employee - Spouse & dependent child(ren) 36 months
- Loss of dependent child status - Dependent child(ren) 36 months
Newly acquired dependent:If a child is born or placed for adoption with an individual who is on COBRA, they will be allowed to add the newly acquired dependent to the COBRA coverage, with the premiums adjusted accordingly for the new addition. Dependent coverage must be elected within the normal plan enrollment period. Please contact CONEXIS Participant Services or the employer sponsoring your health plan coverage for additional information.
Disability extension:A member or dependent may extend their COBRA coverage if determined by the Social Security Administration to be disabled before the qualifying event or within 60 days of the qualifying event. To request an 11 month extension, you must submit a copy of the Social Security Disability determination notice to CONEXIS, or your employer, within 60 days after the notice is received. This notice must be made within the standard 18 month COBRA coverage period.
Paying for COBRA coverage:The cost of your COBRA premiums may come as quite a surprise since while you are employed many employers subsidize a great deal of the expense associated with their group health plans. When you are on COBRA, the employer will no longer pay for your coverage, and you will be responsible for the entire amount plus an administrative fee. Remember these premiums are due the 1st day of each month, and you will be subject to cancellation if payment is not received by the 30th day of each month.
Your coverage ends when:
- You reach the last day of maximum coverage
- Premiums are not paid on a timely basis
- The employer ceases to maintain any group health plan
- You obtain coverage through another employer’s group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of a beneficiary
- A beneficiary is entitled to Medicare benefits
Other things to know about COBRA Continuation Coverage:Changing Plans: Under COBRA you are eligible to continue the same coverage you participated in on your last day of active employment. If your employer offers an Open Enrollment period to its active employees, you will be given the same opportunity to switch between plans during this time.
Initial COBRA Payment: You will have 60 days to elect to participate in your COBRA coverage. After you elect COBRA, you must pay the initial premium within 45 days. The initial premium is likely to be high because it covers the period retroactive to the date your coverage ended through your employer.
Moving: If you relocate out of your COBRA health plans coverage area your COBRA benefits may be drastically altered, reduced, or entirely lost. Your timely COBRA premium payments will still be required to maintain your coverage even if the health plan has little or no value at your new location. The employer is not required to offer you a plan for your new area. Additionally, it is your responsibility to notify CONEXIS or your employer of your new address if you wish to maintain your COBRA coverage; your employer and CONEXIS are not responsible for providing you payment coupons to submit your premium payments - it is your responsibility that a valid payment is received by its due date.
Premium Costs: Like everything else, health care premiums continue to increase. Your premiums can be increased if the health plan cost increases for everyone at the workplace, but generally they must be fixed in advance for each 12 month cycle. CONEXIS will provide you with at least a 30 day notice in advance of a premium adjustment as dictated by the health plans offered at the workplace.
Severance & Subsidies: Some employers, either through bargaining agreements or other contractual arrangements, may subsidize all or part of your COBRA premiums for a specific period of time. If your employer has identified you to CONEXIS as being eligible for a subsidy, your payment coupons will reflect the amount being subsidized by your employer. If you believe you should be eligible for an employer-paid severance or subsidy please consult your employee handbook or contact your employer.
State Mandated COBRA Extensions: Many states have rules and regulations surrounding the extension of employer-sponsored health plans. Unlike Federal COBRA, these state sponsored plans can have variations from types of plans offered to lengths of coverage. For additional information please contact your local Department of Insurance (or equivalent state office), your employer, or CONEXIS Participant Services for additional information.
(Note: This is not intended to be a legal document or description of COBRA administrative services offered by CONEXIS, L.P. Exact services and administrative duties are determined by the signed Services Agreement on file for each employer group. Material contained herein is for informational purposes only.)