Can COBRA Insurance Change While You're on It?

Group health plans that extend health insurance through COBRA must provide former enrollees health care benefits that are identical to those of similar active group plan members, according to U.S. Department of Labor guidelines. Upon electing COBRA continuation coverage, you and your dependents generally receive the same health benefits you had while enrolled as members in the group health plan. During your participation in COBRA, however, your coverage can change as the result of decisions that you make as well as changes to the group health plan.

COBRA Coverage

• COBRA, the acronym for the Consolidated Omnibus Budget Reconciliation Act, entitles you to temporarily continue the health insurance you received as an employee or dependent under a group health plan after a "qualifying event," such as a layoff, causes you and your family to lose eligibility to remain members in the group health plan. Health care benefits that the plan and COBRA coverage provide include inpatient and outpatient hospital care, physician care, surgery, prescription drugs, dental care and vision care.

Benefit Changes

• As a COBRA participant, "the coverage you are given must be identical to the coverage that is currently available under the plan to similarly situated active employees and their families," according to the Department of Labor website. COBRA participants can make the same choices that the plan offers to other members during open enrollment season. However, COBRA participants also must comply with any rules that apply to all group plan members, such as requirements for co-payments, deductibles and coverage limits. If any of the group plan policies change, your coverage also may change.

Beneficiary Changes

• COBRA participants who give birth to or adopt a child while receiving continuation benefits can add the child to their plan. However, a group health plan may end one of your family member's COBRA coverage if he become eligible for Medicare, enrolls in another group health plan, submits late payments or if the employer stops sponsoring a group health plan.

Premium Changes

• When you were enrolled as an active group plan member, the employer paid a portion of your health insurance premium. As a COBRA participant, you must pay the full premium and an additional 2 percent administrative fee. Group health plans generally fix plan premiums at the beginning of each 12-month plan year. However, your premium may change to reflect a change in the group rate that your employer negotiates with the health insurer.

Coverage Length Changes

• Employer-sponsored health plans subject to COBRA must offer 18 months of extended coverage to an employee after an event, such as a resignation, retirement or layoff, causes him to lose eligibility to participate in the group health plan. However, if you become disabled while receiving COBRA benefits you can extend your coverage an additional 11 months. If a second qualifying event occurs, COBRA allows you to request an additional 18 months of coverage.