Is Health Insurance Guaranteed After COBRA Ends?

A beneficiary who loses her job under certain circumstances may make use of COBRA's continuation of health care coverage to temporarily remain on her former employer's group health plan, and may only be required to pay 102 percent of the plan's cost. A worker must elect to receive COBRA coverage following an event that triggers COBRA eligibility. Because COBRA's continuation of coverage provisions are meant to be a stopgap, temporary means to keep workers ensured, coverage expires after a fixed term, at which point insurers and employers aren't required to extend benefits to beneficiaries, though other plans are available.

COBRA Continuing Coverage Terms

• An employee qualifies for COBRA continuing coverage by voluntarily or involuntarily separating from an employer or receiving a reduction in hours. In most cases, COBRA coverage extends for 18 months following the first time a beneficiary pays for his own coverage. If a COBRA beneficiary loses a job a second time during the original coverage term, he may qualify for 36 months of coverage on his former employer's group health plan. If the former employer stops providing his workers a group health plan or the beneficiary doesn't make timely payments, COBRA benefits may terminate early. When a beneficiary reaches the end of COBRA coverage, insurers aren't required to provide a separate plan.

Conversion Plans

• Although it's not required by law, some health insurance companies offer conversion plans to workers who exhaust their COBRA eligibility. Conversion plans frequently offer a low-cost alternative to continuing health care coverage, although the price may exceed premiums paid under COBRA allowances and may provide a lesser amount of coverage. If an insurer offers a conversion plan, the COBRA beneficiary must be notified 180 days before his COBRA coverage expires. COBRA beneficiaries must exhaust their COBRA coverage before electing to take a conversion plan.

HIPAA and Individual Health Plans

• Although the original insurer isn't required to extend coverage to beneficiaries who exhaust their COBRA eligibility, former COBRA beneficiaries are guaranteed minimum coverage through provisions in the Health Insurance Portability and Accountability Act that require workers be eligible for continued coverage following COBRA. A former COBRA beneficiary must enroll in HIPAA programs through state-administered plans within 63 days of exhausting COBRA eligibility. HIPAA mandates that post-COBRA coverage be granted immediately and without exclusions for preexisting conditions.

Ending COBRA Coverage

• A COBRA beneficiary may end her COBRA-mandated coverage before it reaches its 18-month expiration date at any time. A beneficiary who receives coverage through a different group plan from a new employer or decides she can't afford COBRA-related premiums -- although they're usually cheaper than comparable coverage on the individual-plan market -- may end COBRA coverage. If a beneficiary ends COBRA coverage before it expires, she isn't entitled to receive conversion-plan coverage and may not be eligible for HIPAA-based coverage.