Notice of COBRA Continuation Rights

Federal law gives most workers who are covered by employer-provided health plans the right to continue that coverage for themselves and their families after they leave their jobs. Their spouses, ex-spouses and children also have the right to continue coverage in cases where they might otherwise lose it, such as divorce or the employee's death. The federal law that provides these guarantees, known as COBRA, requires insurance companies to send affected people a notice of their rights to continue coverage.

Events

• COBRA's notification requirements center on what the law refers to as "qualifying events" -- circumstances that would cause an employee or someone on that employee's insurance to lose coverage. If you're an employee covered by a company health plan, qualifying events include leaving the company, either voluntarily or involuntarily, or a reduction in work hours that would ordinarily make you ineligible to participate in the plan.

  If you are the spouse or child of an employee, qualifying events also include divorce or legal separation; the employee's death; the employee becoming eligible for Medicare, which usually means the employee will no longer be covered by the company plan, and loss of dependent-child status, which would ordinarily make a person ineligible for coverage.

Notice

• Once it has learned of a qualifying event, an insurance company has 14 days to send an "election notice" to the affected employee and the employee's "beneficiaries" -- people covered under the employee's insurance. This notice explains their rights to continue coverage under the plan, tells them how to choose, or "elect," this continuation coverage and provides a deadline for making a decision.

  It must specify how long the continuation will last, how much it will cost, and what might cause COBRA coverage to end early, such as becoming eligible under a new employer's health plan. It must also tell them what will happen, and when, if they do not choose continuation coverage.

Deadline

• You have 60 days to make a decision on whether to elect continuation coverage. The 60 days starts from either the date you receive the election notice or the date of the qualifying event, whichever is later. If you decline continuation coverage, you can still change your mind, as long as you do it within the 60-day period.

Notifying the Plan

• The responsibility for notifying a health plan of a qualifying event depends on the event. It's the employer's responsibility to report the termination of a worker's employment, a worker's death or a worker becoming eligible for Medicare. It's the responsibility of employees or beneficiaries to notify the plan about divorce, separation or a child's loss of dependent status.

  Employers, employees and beneficiaries don't have to wait until an event actually occurs to provide notice; they can do so beforehand. Generally, though, employers have until 30 days after an event to report it. Employees and beneficiaries have until 60 days after an event.