Can You Elect COBRA If You Have Other Group Insurance?

COBRA continuation coverage allows employees who leave or are terminated from their jobs to keep their existing health care plan while they seek other employment. This helps make the transition between jobs easier for employees and their families. The rules can be confusing when there are other group health plans involved, such as family coverage under a spouse's plan. There are several basic rules to follow when deciding if you should apply for COBRA coverage.

Basic COBRA Rules

• Federal law requires that employers extend an employee's existing health care plan for up to 18 months after a qualifying event occurs. Qualifying events include termination (for any reason other than gross misconduct), death, or a reduction in hours that makes the employee ineligible for coverage. The employee (or his widow) must pay all of the premiums during this period, but the benefit is that the employee does not need to go through underwriting again. If another qualifying event occurs during the coverage period, benefits can be extended up to 36 months.

COBRA Termination

• COBRA benefits terminate for most employees after they get a new job and are covered under a new group health plan, or after 18 months of unemployment has passed. Your benefits will also end if you become eligible for Medicare during the coverage period. If your COBRA benefits have been extended because you became disabled during the coverage period, they will end when it is determined that you are no longer disabled.

Pre-Existing Conditions Limitation

• When you are no longer covered under your employer's health plan due to being terminated or having a reduction in your hours, you may still have coverage under another group health plan, like that of a spouse. If you are covered by another plan that has no limitations or exclusions for pre-existing medical conditions that you have, you are not eligible to sign up for COBRA coverage. If you become covered by another plan while you are covered by COBRA, your COBRA coverage will end. However, if you are facing limitations of coverage in the other plan, you may continue your COBRA plan.

Transition to New Group Plan

• Once you start a new job, you may not be covered under your new group health plan right away. Often, you will begin to pay premiums when you first start work, but coverage under the plan may not begin for 30 to 90 days. You can maintain your COBRA coverage until the first day that the new plan begins to cover you.