COBRA: Do I have the right to continued health insurance?

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COBRA is a federal law that gives some employees the right to temporarily continue their group health insurance despite an event that would usually end coverage. COBRA sets rules for when and how long certain employers must offer employees and their families continuation coverage.

What is COBRA?

In general, COBRA applies to private employers with at least 20 employees and to state and local government employers. It does not apply to the federal government or church employers. Many states also have their own COBRA laws that give similar rights to employees who work for private employers with fewer than 20 employees.

Under COBRA, a qualified beneficiary may elect continuation coverage after a qualifying event. A “qualified beneficiary” is an individual covered by the group health plan. Qualified beneficiaries may include employees, their current or former spouses, and their dependent children. A “qualifying event” is a change that causes loss of coverage. These events may include termination of employment, reduction in hours, death, divorce, separation, Medicare eligibility, and ceasing to be a dependent child under the plan’s terms.

Electing continuation coverage means that you will continue to receive the same health care benefits for a certain period of time. However, you employer will no longer be responsible for paying for your health care coverage. This means your monthly premium costs will increase significantly.

What are my rights?

You employer should provide you with a Summary Plan Description (SDP) that provides important information about the health plan, your rights, and how the plan works after you enroll. Your employer should also provide a Summary of Material Modifications (SMM) if there are any changes to the plan. If you don’t have a copy of your plan documents, submit a written request to your employer. Your employer must provide the documents within 30 days.

The duration of COBRA continuation coverage depends on the type of qualifying event. For termination of employment or reduction in hours, qualified beneficiaries are entitled to 18 months of continuation coverage. Qualified beneficiaries may elect up to 36 months of continuation coverage after other qualifying events.

What does COBRA require my employer to do?

Employers must notify the group health plan within 30 days of a qualifying event. Within 14 days of notifying the health plan, your employer must provide you with an election notice about your rights under COBRA so that you can make an informed decision about whether to continue your coverage. Employers who fails to provide the election notice on time may face a penalty of up to $110/day. They may also be required to reimburse qualified beneficiaries for medical expenses incurred as a result of the failure to notify.

What does COBRA require me to do?

You must timely notify your group health plan if you go through a divorce or legal separation, or if your child loses dependent status under the plan. Most plans require employees to provide notification of these qualifying events within 60 days. However, check your plan to see if your deadline is different. Your plan’s SDP and general notice should explain how to notify the plan of a qualifying event.

If you are a qualified beneficiary, you must have at least 60 days to decide whether to elect continuation coverage. Any or all qualified beneficiaries may elect continuation coverage. For example, your spouse may elect continuation coverage even if you do not. Even if you initlly waive coverage, you may change your mind at any time during the 60-day election period.

You may be required to make your first premium payment within 45 days or your election. You may lose your COBRA rights if you fail to pay on time.

Do you have questions about your rights under COBRA?

Do you have questions about your rights under COBRA? Alan Lescht and Associates has experienced attorneys who can help you navigate the COBRA process. Call us today at (202) 463-6036, email us, or visit our website.