What is COBRA? Who is eligible for COBRA?

COBRA Protections and Eligibility – Part 1 

What is Cobra? 

In 1985, the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) gave employees and their families the right to continue health insurance coverage during times of transition, job loss, and other circumstances. The time period of extended coverage depends on the reason for the loss of healthcare coverage.

COBRA can be used for limited periods of time under circumstances including voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. These are called “qualifying events.” However, if you lose your job due to gross misconduct, you won’t be able to qualify for COBRA.

Am I eligible for COBRA?

So, who is a qualified individual? If your employer had 20+ employees in the prior year, you’ll have the opportunity for a temporary extension of health coverage (“continuation coverage”). Additionally, you must have been employed for more than 50% of the business days the previous year. COBRA requires employers and plans to provide notice of COBRA eligibility to the employees. There are different notice requirements for employees and beneficiaries, depending on the qualifying event that triggers COBRA.

If you qualify for COBRA, you have 60 days to choose whether you would like to proceed with the coverage. This 60-day period generally begins on the day you lose coverage. It should also be noted that COBRA applies to private-sector group health plans as well as the health plans of state and local government employees. COBRA does not, however, apply to plans sponsored by the federal government or by churches and church-related organizations.

Is my family covered?

Your family member is considered a qualified beneficiary if they were covered by the group health plan up until the day before you lost coverage. Usually, a qualified beneficiary means the covered employee, any dependent children, or the employee’s spouse or former spouse.

For the spouse or dependent child of a covered employee, they can qualify for COBRA coverage if: 1) the covered employee dies; 2) there is a divorce or legal separation; 3) the covered employee can qualify for Medicare; 4) the number of hours was reduced for the job; 5) if the employee is forced to terminate for a reason other than gross misconduct; or 6) the dependent child loses their status and will be eligible for coverage until age 26.

District of Columbia

          The District of Columbia has a law similar to federal COBRA called the Continuation of Health Coverage Act. The Act applies to D.C. employers with a group health insurance plan with fewer than twenty employees. Employers must offer coverage to be extended for a period of three months following the date that coverage would have ended.

Maryland

Like D.C., Maryland also has a mirroring COBRA law, but with some limitations. Maryland’s law only applies to employers with a group health insurance plan with fewer than twenty employees. Further, continuation coverage must be offered to an employee who lives in Maryland, who had coverage from the employer for at least three months, and who either resigns or loses employment due to no fault of their own.

Continuation coverage must also be offered to the former spouse and dependent children of an employee after a divorce. However, coverage may end for the former spouse upon the former spouse’s remarriage. Continuation coverage must also be offered to the surviving spouse and dependent children of an employee who dies. The employee must have resided in Maryland and had coverage with the employer for at least three months prior to death. In all cases, continuation coverage must be offered for eighteen months, with the exception that a former spouse’s continuation coverage ends upon remarriage.

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