COBRA FAQs

COBRA FAQs

COBRA FAQs

We've gathered a few of the most frequently asked questions related to COBRA laws, regulations and administration.  Read through and see if the answer you're looking for is included.  If you still need help, give our COBRA team a call today at (800) 362-5461.

 
1.     Will a member be eligible to receive COBRA under my group?

That depends on the answer to several other questions, including whether or not the group is required to comply with COBRA regulations and the reason for termination.  The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees in the prior year. The law does not apply to health plans sponsored by the Federal Government or by churches and certain church-related organizations.The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits due to voluntary or involuntary job loss, reduction in the number of hours worked, a transition between jobs, death, divorce, and other life events the right to choose to continue group health benefits provided by their employer for a set time period.  To be eligible, the employee or family member must have been enrolled in the group health plan offered by their employer.  Qualified individuals choosing to enroll in COBRA are in fact buying back into their employer’s group plan and will be required to pay the entire premium plus a 2 percent administrative fee.


2.      Who sends the COBRA notification to the member?

Assuming the company is required to offer COBRA coverage (see above) group health plans must provide covered employees and their families with certain notices explaining their COBRA rights. First, COBRA rights must be described in the employer plan's Summary Plan Description (SPD).  Second, group health plans must give each employee and spouse who becomes covered under the plan a general notice describing COBRA rights within the first 90 days of coverage.  Before a group health plan must offer COBRA continuation of coverage, a qualifying event must occur.  The employer has 45 days to notify the qualified beneficiary (COBRA eligible employer or family member) 


3.      Will COBRA effect the subscriber’s rate?  

Qualified individuals choosing to enroll in COBRA are in fact buying back into their employer’s group plan and will be required to pay the entire premium for coverage plus a 2 percent administrative fee.  While there is a grace period of 30 days for COBRA, premiums are due in advance of the month of coverage.  Failure to make timely payment will result in coverage being suspended and or terminated.


4.      How many months of COBRA is someone eligible for? 

How many months COBRA continuation of coverage is available depends on the type of qualifying event that triggered COBRA eligibility.  When the qualifying event is the covered employee's termination of employment or reduction in hours of employment, qualified beneficiaries are entitled to 18 months of continuation coverage. COBRA regulations also require that coverage extend from the date of the qualifying event for a limited period of 18 or 36 months with no gap in coverage. Employers terminating and employee for gross misconduct are not required to offer COBRA continuation of coverage.


When the qualifying event is the end of employment or reduction of the employee's hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee's spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date his/her employment ends (termination of employment is the COBRA qualifying event), COBRA coverage for his/her spouse and children would last 28 months (36 months minus 8 months). For more information on how entitlement to Medicare impacts the length of COBRA coverage, contact the Department of Labor's Employee Benefits Security Administration at askebsa.dol.gov or by calling 1-866-444-3272.


5.      How large does my group have to be do offer COBRA?

The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees, or by state or local governments. The law does not apply to plans sponsored by the Federal Government or by churches and certain church-related organizations. 


6.      If I’m a small group and I’m not mandated to offer COBRA, can I chose to offer it?

If your company has fewer than 20 employees s in the prior year there is no requirement to extend coverage via COBRA and generally group health insurance carriers will not allow companies that are not required to offer COBRA continuation of coverage to do so. 


7.      Is a spouse/dependent eligible for COBRA when a subscriber has Medicare or retiring? 


Yes, When the qualifying event is the end of employment or reduction of the employee's hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee's spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date his/her employment ends (termination of employment is the COBRA qualifying event), COBRA coverage for his/her spouse and children would last 28 months (36 months minus 8 months). For more information on how entitlement to Medicare impacts the length of COBRA coverage, contact the Department of Labor's Employee Benefits Security Administration at askebsa.dol.gov or by calling 1-866-444-3272.