|  | Healthcare Industry | Health Insurance

Can COBRA Coverage Be Extended?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides that most employees who lose their jobs or experience a loss in working hours can continue on their current group health plan. Only if your company does not need to comply with this law or if you do not elect coverage within a specified period will you not have COBRA benefits extended.

  1. COBRA Eligibility

    • Not everyone is eligible for COBRA coverage. If your employer has less than 20 total employees, itmay not offer COBRA. You must be enrolled in your company's group health insurance plan at the time of job loss to be eligible for COBRA. Your dependents can also receive COBRA coverage if they were on your plan when you were working. In most instances, if you left your job, experience a layoff or reduction in job hours, COBRA will be extended so that you can stay on your current plan. Even if you choose not to elect COBRA, your dependents can still enroll.

    Standard Time Frames

    • The standard extension for COBRA benefits is 18 months from the time of job loss or reduction of hours. Your health plan may allow you to continue on the group plan beyond 18 months, but it must offer at least that time frame. Depending on the reason for your COBRA eligibility, you may receive up to 36 months of COBRA coverage. Coverage is retroactive to the first day you lost benefits. In rare occasions, you may lose COBRA coverage within 18 months if your company discontinues offering group insurance, does not pay its premiums or you become Medicare eligible or obtain group coverage through another employer.

    Notification Time Frame

    • The COBRA act specifies time frames in which your employer and group plan administrator are required to provide notification to you and each other. First, your employer must notify the group plan administrator within 30 days of your loss of benefits as an active employee. Second, the plan administrator has 14 days to provide notification to you of the availability of COBRA benefits. You have up to 60 days to elect COBRA from the date of the notification to you. Whenever you elect COBRA, your coverage starts the day you would have lost your benefits.

    Premiums

    • Employers often do not contribute toward the individual's COBRA premium. Instead of a shared cost, the COBRA enrollee may be responsible for the entire premium cost. When available, the federal government may have a provision to allow premium subsidies for those on COBRA. Individuals receive a reduced premium; however, as of March 2011, this is not in place. For those on COBRA prior to May 31, 2010, the subsidy is extended for 15 months but unavailable to anyone whose COBRA benefits begin later than this date. Plans may allow conversion from a group plan to an individual plan after COBRA ends.

Health Insurance - Related Articles