|  | Healthcare Industry | Health Insurance

COBRA: Rights to Resume Coverage

Losing a job eliminates not only an income but also can cause a loss of health benefits. Contracting a disorder or disease while you do not have health coverage can take away your ability to have those conditions covered for 6 to 36 months after you purchase a policy. Federally mandated COBRA gives you the right to resume and maintain your health coverage for 18 to 36 months in the event you become unemployed.

  1. Company Criteria

    • To qualify for COBRA coverage, you must have worked for a company that has a minimum of 20 employees working at least 50 percent of the previous calendar year. Part-time employees are considered fractions of employees. The company uses a specific mathematical calculation to determine how many hours must be worked by part-time employees to equal a full-time employee for the sake of COBRA calculations.

    How It Works

    • Your former employee has a legal obligation to notify you of your right to resume health coverage through COBRA. The notification must include the required time frame to sign up and the cost of the coverage per month. If your employer was paying a portion of your premium while you were employed, you will have to pay that portion if you elect COBRA coverage, which means your COBRA premium will typically be higher than your premium was when you were employed. If you elect to take COBRA coverage, your health care benefits remain identical to what you had while employed.

    Who Is Covered

    • COBRA is available to qualifying former employees, retirees and their dependents. To cover your dependents, you must accept COBRA coverage for yourself as well. The only former employees not eligible for COBRA coverage from qualifying companies are employees who were terminated for gross misconduct at work. Others, such as those who were covered under their spouse's health insurance plan but lost the coverage as a result of a divorce, are also eligible to continue to their health insurance through COBRA.

    Qualifiers for Employees

    • The only employees eligible for the right to resume coverage through COBRA are employees who were participating in the company's health insurance plan while employed. If an employee chose not to participate in the company's offered health plan during employment and then becomes unemployed, COBRA will not be an option.

    Time Line

    • If you are eligible to resume coverage through COBRA, you must be given a minimum of 60 days to decide whether or not to take the policy. The company must notify you of your COBRA rights within 14 days of termination. In addition, there is no gap in coverage; coverage under COBRA begins the day after you were terminated or left your job, even if you take the entire allotted time to elect to resume your coverage under COBRA.

    Cancellation

    • Your right to resume coverage under COBRA can be canceled if your former employer stops offering coverage to employees company wide. In addition, if you fail to pay premiums on time your coverage can be canceled.

Health Insurance - Related Articles