Q: What is COBRA?
A: The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) was enacted into law on April 7, 1986. The law amended the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code, and the Public Health Service Act to provide continuation of group health coverage, to those who would have been otherwise terminated from coverage due to what has been termed a "Qualifying Event".
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Q: What is a Qualifying Event?
A: A Qualifying Event is the event that triggers a loss in coverage under the group health plan. The type of Qualifying Event determines the length of continuation coverage for which the Qualified Beneficiary is eligible.
In general, employees are entitled to 18-months of continuation coverage if the qualifying event was employment termination or reduction in hours of employment.
If the qualifying event is due to death of the employee, Medicare entitlement, divorce/legal separation, or dependent child losing eligibility the employees dependents are entitled to 36-months of continuation coverage.
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Q: How do I elect COBRA coverage?
A: You must complete a Continuation Coverage Election Form and send it to your COBRA administrator before your election period expiration date. Qualified Beneficiaries have 60 days from either the date of the Qualifying Event Notification Letter or from the Loss of Coverage date, whichever is later, to elect COBRA. Following the receipt of your election notice and initial premium, the COBRA administrator will reinstate coverage with the appropriate carriers.
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Q: When is the initial COBRA premium payment due?
A: The first payment covers the period beginning with the "qualification" date and continues through the end of the month in which your Election was made. The first payment must be postmarked within 45 days of the date the election was mailed. There is no grace period. Jump to Top
Q: Can continuation coverage be elected for only certain members of the family?
A: Yes. Each family member who was covered by the plan on the day before the qualifying event is entitled to elect continuation coverage. Each individual has independent election rights to choose coverage apart from other family members.
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Q: Can my premiums change during the period of continuation coverage?
A: Yes. There is a 12-month determination period set by the employer during which your premium for continuation coverage can change if the increase is due to a disability extension, when a plan is requiring payment of less than the maximum amount, or when you change to more expensive coverage.
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Q: Can a third party pay for premiums?
A: Yes. In some cases, arrangements are made for a third party to pay premiums for continuation coverage on behalf of a qualified beneficiary. But if third party premium payment arrangements are made, please be aware that the COBRA participant is ultimately responsible for proper and timely premium payment.
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Q: When does COBRA coverage begin?
A: Continuation coverage begins immediately following your coverage termination date, regardless of when you send in your Continuation Coverage Election Form. Continuation coverage is retroactive. Therefore, you should be billed for and premiums will be applied beginning the day after your coverage termination date.
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Q: I returned my Continuation Coverage Election Form to my COBRA Administrator. How long does it take to show that I have active coverage after I have elected to continue my health coverage?
A: After receiving your election, your COBRA Administrator should send you a premium invoice (if you did not already send an initial payment with your Election Form) and any enrollment forms required by your plan. You must immediately complete and return any enrollment form to the COBRA Administrator and pay your initial premium by the date specified on the premium invoice. In general, it takes the plan(s) approximately 15-20 days following receipt of both your enrollment form(s) and premium payment to complete the entire reinstatement process.
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Q: I have turned in my election form, initial premium payment and enrollment materials to COBRA Administrator. Why is the plan still not showing me as an active plan participant?
A: The COBRA Administrator makes every effort to minimize the turnaround time of your reinstatement process by quickly forwarding your enrollment materials and payment to the plan(s). However, we cannot speed the reinstatement process once your election materials have been sent to the insurance plan(s). It typically takes the plan(s) 15-20 days following receipt of both your enrollment form and premium payment to update their systems. Be assured that once your reinstatement is complete, your records will reflect no lapse in coverage and your benefits will resume without interruption of coverage.
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Q: What if I need prescriptions or health care services before I am reinstated on the plan?
A: If you need services by a health care provider or pharmacy prior to your reinstatement, you may be required to pay the full medical/dental/prescription expense until the reinstatement process is complete. Once reinstated, you can submit claims to the plan(s) for reimbursement of eligible expenses you may have incurred. To accelerate the reinstatement process, it is important to pay for coverage promptly and complete and return all requested forms to your COBRA Administrator as soon as possible.
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Q: Can my premiums change during the period of continuation coverage?
A: Yes. There is a 12-month determination period set by the employer during which your premium for continuation coverage can change if the increase is due to a disability extension, when a plan is requiring payment of less than the maximum amount, or when you change to more expensive coverage.
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Q: Can I add continuation coverage for additional family members or make other changes to my coverage?
A: In general, you are entitled to add family members when the plan allows similarly situated active employees to add additional family members to the plan. For example, under HIPAA special enrollment rules, you may add coverage for a new spouse upon marriage and/or for a dependent child upon the birth or adoption of a child. Additionally, during an open enrollment period you may add or delete family members, switch to another group health plan, choose another benefit package under the same group health plan or make additional changes as long as these options are available to similarly situated active employees who have not had a qualifying event.
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Q: How long can I stay on continuation coverage?
A: In general, you are entitled to 36 months of continuation coverage unless your qualifying event was employment termination or reduction in hours of employment. In such case, you are entitled to 18 months of continuation coverage. Please refer to your Continuation Coverage Election Notice for additional information on the duration of coverage. Additionally, certain states have adopted laws that may make you eligible to continue your coverage past the end of your Federal COBRA eligibility period. Please check with your insurance carrier for more information.
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Q: Can I terminate my coverage at any time during the month?
A: No. Premiums are applied from the first through the end of each month. Coverage can only be terminated on the last day of the month.
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Q: Will my coverage be affected if I relocate to another area?
A: Some health plans (HMOs, for example) require that you live within a particular service area in order to receive treatment. If you relocate out of that service area, coverage under the plan may not be available to you and your Continuation Coverage will end.
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Q: Where do I send my insurance claims?
A: The COBRA Administrator does not process insurance claims. We only handle the duties related to billing and premium collection of your continuation coverage. Please call the Member Services Department listed on the back of your insurance card for any of your claims inquiries.
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Q: What is the general purpose of the COBRA law?
A: Under normal circumstances, only active full-time employees can participate on employers group health insurance plans. Prior to COBRA, when an employee left the company, they and any covered family members lost their health insurance as well, since the employee no longer fit the definition of a full-time employee. If the employee or a family member was ill, they would be unable to obtain insurance in the open market since they are already sick. Congress, in passing the COBRA law, remedied this situation by mandating employers simply stand at the back door of the business and offer the ex-employee and/or the covered dependents the opportunity to buy the employers health insurance back from the employer, even though the employee doesn't work there anymore. In this way, the sick employee or dependent stays insured in the private sector (your health plan) and off Medicaid, or other welfare benefit program.
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Q: What is the purpose of the Initial Notification?
A: It serves two purposes. First it highlights the potential COBRA benefits that may be available to the covered employee and/or covered dependents in the future. And, secondly, it details the covered employee and/or covered dependents notification obligations to the plan administrator regarding divorces and dependent children ceasing to be dependents under the terms of the plan.
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