The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires most group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated. COBRA requires continuation coverage to be offered to covered employees, their spouses, and their dependent children when group health coverage would otherwise be lost due to certain specific events. Those events include the death of a covered employee, termination or reduction in the hours of a covered employee’s employment for reasons other than gross misconduct, divorce, or legal separation from a covered employee, a covered employee’s becoming entitled to Medicare, and a child’s loss of dependent status (and therefore coverage) under the plan.
Benefits of COBRA
If you elect COBRA continuation coverage, 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 (generally, this is the same coverage that you had immediately before the qualifying event, i.e., termination or reduction in hours). You will also be entitled, while receiving COBRA coverage, to the same benefits, choices, and services that a similarly situated participant or beneficiary is currently receiving under the plan, such as the right to an open enrollment season to choose among available coverage options.
Duration of COBRA Coverage
Generally, if you elect COBRA coverage due to termination of employment or reduction in hours of employment, you are entitled to a maximum of 18 months of COBRA coverage. However, a group health plan may terminate your coverage earlier than the end of the maximum period if you do not pay your premiums in full on a timely basis.
Extension of COBRA Coverage For Some SSDI Recipients
If you are disabled and qualify for Social Security Disability Insurance (SSDI) benefits, you may become entitled to an 11-month extension of the maximum period of COBRA coverage (for a total maximum period of 29 months of COBRA coverage). During this extended period, the plan can charge you an increased premium, up to 150% of the cost of coverage.
To qualify for the extension, you must meet the following requirements (please note that the requirements are generally enforced strictly):
- You must be determined by the Social Security Administration (SSA) to have become disabled at some time before the 60th day of COBRA coverage; AND
- Your disability must continue during the rest of the 18-month period of COBRA coverage.
The procedure for requesting the extension is also strictly enforced and includes the following steps:
- You must have a ruling from SSA that you became disabled within the first 60 days of COBRA continuation coverage; AND
- You must send the plan a copy of your SSDI Award Letter within 60 days of receipt, but this must occur before the expiration of your 18-month period of coverage.
If these requirements are met, your entire family will qualify for an additional 11 months of COBRA continuation coverage.
For more detailed information on COBRA continuation coverage, please refer to the United States Department of Labor at www.dol.gov.