Monday, February 23, 2009

Cobra Insurance Coverage

Cobra Insurance Coverage
Cobra Insurance Coverage

There are three elements to qualifying for COBRA benefits. COBRA establishes specific criteria for plans, beneficiaries and events which initiate the coverage.

PLAN COVERAGE

Group health plans for employers with 20 or more employees on more than 50 percent of the working days in the previous calendar year are subject to COBRA. The term "employees" includes all full-time and part-time employees, as well as self-employed individuals. For this purpose, the term employees also includes agents, independent contractors and directors, but only if they are eligible to participate in a group health plan.

BENEFICIARY COVERAGE

A qualified beneficiary generally is any individual covered by a group health plan on the day before a qualifying event. A qualified beneficiary may be an employee, the employee's spouse and dependent children, and in certain cases, a retired employee, the retired employee's spouse and dependent children.

QUALIFYING EVENTS

Qualifying events" are certain types of events that would cause, except for COBRA continuation coverage, an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the required amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of continuation coverage.

The types of qualifying events for employees are:

- Voluntary or involuntary termination of employment for reasons other than "gross misconduct"
- Reduction in the number of hours of employment

The types of qualifying events for spouses are:

- Termination of the covered employee's employment for any reason other than "gross misconduct"
- Reduction in the hours worked by the covered employee
- Covered employee's becoming entitled to Medicare
- Divorce or legal separation of the covered employee
- Death of the covered employee

The types of qualifying events for dependent children are the same as for the spouse with one addition:

- Loss of "dependent child" status under the plan rules

Cobra Insurance Laws

Cobra Insurance Laws
Cobra Insurance Laws

COBRA outlines procedures for employees and family members to elect continuation coverage and for employers and plans to notify beneficiaries. The qualifying events contained in the law create rights and obligations for employers, plan administrators and qualified beneficiaries.

Qualified beneficiaries have the right to elect to continue coverage that is identical to the coverage provided under the plan. Employers and plan administrators have an obligation to determine the specific rights of beneficiaries with respect to election, notification and type of coverage options.

Cobra Insurance Forms

Cobra Insurance Forms
Cobra Insurance Forms

63 Day Break in Coverage
A period of 63 consecutive days in which an individual has no Creditable Coverage not counting Waiting Periods or Affiliation Periods.

ADA
Americans with Disabilities Act of 1990

AD&D
Accidental Death and Dismemberment Plan

Affiliation Period
The time an HMO may require you to wait after you enroll and before your coverage begins. HMOs that require an affiliation period cannot exclude coverage of pre-existing conditions under group health plans. Premiums cannot be charged during HMO affiliation periods. See also HMO.

Automatic Certificate of Creditable Coverage
The Certificate of Creditable Coverage required to be automatically furnished to each individual when normal coverage terminates under the plan and again when COBRA coverage terminates.

Bundling
Combining two forms of insurance into one policy, for example vision and dental, or medical and dental. Commonly occurs with non core benefits. Life/AD&D, LTD, STD and FSA Dependent Care Reimbursement Accounts are excluded under COBRA, unless they are bundled with the group health plan.

Cafeteria Plan
A cafeteria plan is not a typical employee benefit plan. It does not provide benefits directly to employees; rather, it serves as a vehicle for employees to elect benefits under other plans and to finance their elections. Cafeteria plans must comply with the requirement in Code Section 125. Cafeteria plans give employees an opportunity to choose among a menu of benefits consisting of cash and certain nontaxable benefits (for example, health insurance benefits). In the simplest form of cafeteria plan, the employer contributes an amount to the plan that the employee can spend to buy various benefits. If the employer contribution exceeds the cost of the employee’s chosen benefits the employee may take the excess cash as additional taxable wages, assuming the plan allows such a cash-out option. If the employer contribution is insufficient to pay for the cost of the employee’s chosen benefits; the employee can reduce his salary to pay for the excess cost on a pre-tax basis.

CFR
Code of Federal Regulations

Core benefits
Medical and prescription drug only.

CHAMPUS
Civilian Health and Medical Program of the Uniformed Services (known since March 1995 as TRICARE).

COBRA
Consolidated Omnibus Budget Reconciliation Act of 1985, which among other things established the health care continuation requirements that are found in ERISA, the Code and the PHSA. COBRA requires that if an employee or other “qualified beneficiary” loses employer-provided health coverage due to termination of employment or another specified triggering event, the group health plan must offer continued health care coverage to the qualified beneficiary. The qualified beneficiary may be required to pay the full cost for the coverage. This ‘COBRA Coverage” has limited duration. In most cases, the maximum COBRA period is 18 or 36 months from the date of the qualifying event.

Continuous Coverage
Health insurance coverage that is not interrupted by a significant lapse. When joining a health plan, coverage is considered continuous if there is not a break of 63 or more consecutive days. Employer waiting periods and HMO affiliation periods do not count as gaps in health insurance coverage for the purpose of determining if coverage is continuous.

Conversion Coverage
The insurance law of most states requires health insurers to provide conversion coverage to employees or dependents that lose group insurance coverage that an employer has provided. Conversion coverage is individual insurance coverage, and typically costs more, and provides fewer benefits than does the group insurance coverage. COBRA requires a group health plan to provide the option of enrollment under a conversion health plan that is otherwise generally available under the plan during the last 180 days of the COBRA maximum coverage period.

COPCC
Certificate of Prior Creditable Coverage (for HIPAA). The certificate that must be furnished under HIPAA by Group Health Plans and Health Insurance Issuers to individuals who lose coverage under employer-provided Group Health Plans. The certificate must be furnished automatically when normal coverage terminates and again when COBRA coverage terminates. The certificate must also be furnished upon written request made within 24 months after plan coverage terminates. The certificate documents the individual’s Creditable Coverage.

Covered Employee
An individual who is (or was) provided coverage under a group health plan by virtue of the performance of services by the individual for 1 or more persons maintaining the plan. Covered employee includes retirees, independent contractors, self-employed persons and partners of a partnership.

Creditable Coverage
The period of an individual’s coverage under a Group Health Plan, health insurance, Medicare of any one of several other specified health plans or health insurance sources that is not interrupted by a 63 day break in coverage.

Dangerous Activities Exclusion or Limitation
A plan provision that makes individuals who engage in dangerous activities ineligible for coverage or a plan provision that excludes coverage for injuries caused by engaging in dangerous activities.

DHHS
Department of Health and Human Services

Disclosure
Typically refers to the various disclosure obligations imposed by ERISA on employee welfare benefit plans, including provisions of Summary Plan Descriptions and Summaries of Material Modification.

DOL
Department of Labor

EAP - Employee Assistance Plan

EEOC
The United States Equal Employment Opportunity Commission. This commission is responsible for the investigation of ALL discriminatory matters covered by Title VII of the Civil Rights Act, Age Discrimination Act, Americans with Disabilities Act, Sexual Harassment Laws and other similar discriminatory matters. It may also bring a case on behalf of a victim of such acts.

Election form
Form used to enroll in the cobra plan, listing things such as qualifying events, contact information, beneficiaries, start date, end date, etc.

Eligible Individual
Relevant for HIPAA’s Individual Market Insurance Rules that apply to Health Insurance Issuers, the term generally means an individual with 18 or ore months of Creditable Coverage who has exhausted available COBRA (and/or state law) coverage.

Elimination Rider
A feature permitted in individual health plans that exclude coverage for a specific health condition, body part, or body system. Unlike pre-existing condition exclusion periods, which can be no longer than 12 months, elimination riders can last indefinitely. Individual health plans can look back 3 years for evidence of a health problem. You can apply to have an elimination rider modified or removed, but the health plan is not obligated to do so.

Enrollment Date
With respect to any individual covered under a Group Health Plan, the date of enrollment or, if earlier, the first day of the Waiting Period for such enrollment.

Enrollment Period
The period during which all employees and their dependents can sign up for coverage under an employer group health plan. Besides permitting workers to elect health benefits when first hired, many employers and group health insurers hold an annual enrollment period, during which all employees can enroll in or change their health coverage. See also Group Health Plan, Special Enrollment Period.

Entitlement
Definition goes here.

EOI
Evidence of Insurability

ERISA
ERISA is the Employee Retirement Income Security Act of 1974, as amended. ERISA is a federal law governing the administration, supervision, and management of health and welfare plans, as well as pension plans.

Federally Eligible
Status you attain once you have had 18 months of continuous creditable health coverage. To be federally eligible, you also must have used up any COBRA or state continuation coverage available to you; you must not be eligible for Medicare, Medicaid, or a group health plan; you must not have other health insurance; and you must apply for individual health insurance within 63 days of losing your prior creditable coverage. When you are buying individual health coverage, federal eligibility confers greater protections on you than you would otherwise have.

Fee-For-Service (FFS) Plan
Health plan that allows the enrollee to choose which doctors and hospitals to use without requiring or providing incentives for the enrollee to use a network of doctors and hospitals. FFS plans are more costly than managed care plans such as HMOs and PPOs.

First Day of Coverage
Term used in interim regulations in place of Date of Enrollment to clarify that the Look Back Rule operates from the date of actual enrollment (or if earlier, the beginning of the waiting period) rather than the date an enrollment application is completed.

Form 5500
The annual information return required to be filed by many ERISA employee benefit plans and by cafeteria plans and educational assistance plans, using the Form 5500 series. Also known as the Annual Report.

FMLA
Family and Medical Leave Act of 1993. The FMLA generally applies to employers with 50 or more employees. Though it does not amend the COBRA provisions in ERISA, the PHSA or the Code, it requires employers to permit employees to take up to 12 weeks of Family Medical Leave a year and to continue to provide health benefits during the leave.

FSA
Flexible Spending Account. A health FSA is a “medical reimbursement” plan that is a “flexible spending arrangement.” Example: A cafeteria plan permits participants to elect coverage under a medical reimbursement plan with an annual limit of up to $1,200 and to pay for that coverage with pre-tax salary reduction dollars. The plan reimburses employees for medical and dental expenses not otherwise reimbursed by the employer’s group health plan (e.g., copays, deductibles, eyeglasses, and orthodontia). A participant who elects the maximum $1,200 of coverage must reduce his/her annual taxable wages by $1,200 (his/her annual premium) to pay for the coverage. This medical reimbursement plan is a flexible spending arrangement. The maximum amount of reimbursement available for a plan year ($1,200) is equal to 100% of the annual premium ($1,200), which is far less the and 500% threshold contained in Q/A-7(c) of Proposed Treasury Reg. 1.125-2 (1989).

Fully Insured Group Health Plan
Health insurance purchased by an employer from an insurance company.

GTL
Group Term Life Plan

Group Health Plan
A plan sponsored by an employer, union or professional association that covers at least 2 employees and can be insured or self-insured.

Guaranteed Issue
A requirement that health plans must permit you to enroll regardless of your health status, age, gender, or other factors that might predict your use of health services. By federal law, all health plans sold to small employers are guaranteed issue. Plans that are guaranteed issue can turn you away for other reasons.

Guaranteed Renewability
A feature in most health plans that means your coverage cannot be canceled because you get sick. HIPAA requires health insurance to be guaranteed renewable. Your coverage can be canceled for other reasons unrelated to your health status.

Health care provider
Include providers who render medical care and are recognized by the Federal Employees Health Benefits Program, certified under Federal or State law, recognized as a Native American "traditional healing practitioner," or who practice in a foreign country.

Health Insurance
Benefits consisting of medical care (provided directly or through insurance or reimbursement) under any hospital or medical service policy, plan contract, or HMO contract offered by a health insurance company or a group health plan. Excludes accident or disability income insurance, workers compensation, automobile insurance with medical coverage, coverage for on-site medical clinics or dental or vision benefits.

Health Plan Year
That calendar period during which your health plan coverage is in effect. Many group health plan years begin on January 1, while others begin in a different month.

HIPAA
Health Insurance Portability and Accountability Act of 1996. Generally, HIPAA restricts the use of preexisting condition exclusions, creates special enrollment periods and prohibits discrimination based on health-status related conditions in enrollment and premiums. HIPAA also creates an obligation for most group health plans or their insurers to provide certificates of creditable coverage to individuals who ceased to be covered by a group health plan. Administration of the certificate requirements is often coordinated with administration of COBRA. Because HIPAA requires a certificate to be issued not only when coverage first ceases, but also when COBRA coverage ceases, HIPAA effectively creates a new notice requirement in COBRA administration when COBRA coverage expires or is terminated.

HMO
Health Maintenance Organization. HMOs usually limit coverage to care from doctors who work for or contract with the HMO. They generally do not require deductibles, but often do charge a copayment for doctor visits or prescriptions. If you are covered under an HMO, the HMO might require an affiliation period before coverage begins.

Individual Health Plan
Private policies purchased by the self-employed, unemployed or people that have no group health insurance for themselves (or their family members).

IRC
Internal Revenue Code, Title 26

Large Group Health Plan
One with more than 50 eligible employees.

Late Enrollee
An individual who enrolls in a plan after the first available enrollment period but not including an individual who is a Special Enrollee. Late enrollees may be subject to a longer pre-existing condition exclusion period.

Lay-Off
A Lay-Off is an employment decision where the employer makes the decision not to replace a position and the reduction occurs because of financial considerations. A Lay-Off is not a discharge.

Leave Entitlement
Office of Personnel Management regulations clarify that an employee must invoke his or her entitlement to Family and Medical Leave Act (FMLA) leave, subject to the notification and medical certification requirements. An employee may not invoke entitlement to FMLA leave retroactively for any previous absence from work

Look Back Rule
One of the restrictions of Preexisting Condition Exclusions imposed by HIPAA under which such exclusions are limited to conditions for which medical advice, diagnosis, care or treatment was recommended or received within the six-month period prior to the Enrollment Date. Also The maximum length of time, immediately prior to enrolling in a health plan that can be examined for evidence of pre-existing conditions.

LTD
Long Term Disability

Medicaid
A state program providing comprehensive health insurance coverage where eligibility levels and covered benefits vary.

Medically necessary
Services or supplies that are proper and needed for the diagnosis, direct care, or treatment of your medical condition, meet standards of good medical practice, and are not mainly for the convenience of you or your doctor.

Medicare
A federal government program that pays for services and supplies it considers "medically necessary"

MEWA
Multiple Employer Welfare Arrangement

MHPA
Mental Health Parity Act

NAIC
National Association of Insurance Commissioners

NMHPA
Newborns’ and Mothers’ Health Protection Act of 1996.

None core benefits
Dental, and vision, EAP and FSA Medical Reimbursement.

Nondiscrimination
A requirement that group health plans not discriminate against you based on your health status. Your coverage under a group health plan cannot be denied or restricted, nor can you be charged a higher premium, due to your health status. Group health plans can restrict your coverage based on other factors (such as part time employment) that are unrelated to health status.

Nondiscrimination Rules under HIPAA
Rules added by HIPAA that prohibit a Group Health Plan from discriminating with regard to eligibility or premiums or contributions based on any enumerated “health status-related factor,” including medical condition or history, disability or genetic information.

PCE
Preexisting Condition Exclusion

PHSA
Public Health Service Act. The PHSA contains the provisions of COBRA that govern continuation coverage under government-sponsored group health plans.

Plan Administrator
Either the person or entity named as plan administrator in the plan instrument, or, if no one is named, the plan sponsor. (For private sector plans under ERISA, the Department of Labor may designate a plan administrator.) The employer or the qualified beneficiary or the covered employee, depending on the nature of the qualifying event, must notify the plan administrator when a qualifying event occurs. The plan administrator, in turn, must notify any qualified beneficiary of his or her rights under COBRA.

Plan Sponsor
The plan sponsor of a single-employer plan is the employer. In plans maintained by two or more employers or by one or more employee organizations, the plan sponsor is the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan. Under COBRA, a plan sponsor has the obligation to provide COBRA coverage.

Portability
An employee’s ability to carryover plan coverage from one employer to the next. HIPAA does not provide for such portability, but approximates portability by requiring that employees receive credit for prior coverage against any new plan’s preexisting condition exclusion.

PPO
Preferred Provider Organization. A type of managed care plan that will cover more of your medical expenses when you use a health care provider such as a doctor or a hospital that is part of the PPO network. When you use a provider outside the network, the health plan will cover less of the costs.

Pre-existing Condition
Any condition (either physical or mental) for which medical advice, diagnosis, care, or treatment was recommended or received within the 6-month period immediately preceding enrollment in a health plan. - Group health plans cannot count pregnancy as a pre-existing condition. Genetic information about your likelihood of developing a disease or condition, without a diagnosis of that disease or condition, cannot be considered a pre-existing condition. Newborns, newly adopted children, and children placed for adoption covered within 30 days cannot be subject to pre-existing condition exclusions.

Pre-existing Condition Exclusion Period
The time during which a health plan will not pay for covered care relating to a pre-existing condition. See also Pre-existing Condition.

PWBA
Pension and Welfare Benefits Administration

Qualified Beneficiary
Individuals who are allowed to continue coverage based upon certain "qualifying events".

Qualifying event
A loss of coverage under a group health plan on account one of the specific events described in COBRA:

- Death of the covered employee
- Voluntary or involuntary termination of the covered employee’s employment (other than by reason of gross misconduct), or reduction of hours of the covered employee’s employment
- Divorce or legal separation of the covered employee from the employee’s spouse
- Covered employee becomes entitled to benefits under Medicare
- Dependent child ceasing to be a dependent child under the generally applicable requirement of the plan; and
- An employer’s bankruptcy (but only with respect the health coverage for retirees and their families).

Requested Certificate of Creditable Coverage
The Certificate of Creditable Coverage required to be furnished to each individual upon written request made within 24 months after plan coverage terminates. The certificate documents the individual’s Creditable Coverage.

Self-Insured Group Health Plans
Plans set up by employers who set aside funds to pay their employees’ health claims. Because employers often hire insurance companies to run these plans, they may look to you just like fully insured plans. Employers must disclose in your benefits information whether an insurer is responsible for funding, or for only administering the plan. If the insurer is only administering the plan, it is self-insured. Self-insured plans are regulated by the U.S. Department of Labor.

Serious health condition
Via the Department of Labor's (DOL's) regulations, includes chronic conditions, such as asthma, diabetes, and conditions requiring multiple treatments, such as chemotherapy or kidney dialysis.

Small Group Health Plans
Plans with at least 2 but not more than 50 eligible employees.

SPD
Summary Plan Description - A summary plan description is an ERISA-required summary of the terms of an employer sponsored “welfare benefit plan” that must be furnished to all participants and COBRA beneficiaries.

Special Enrollment
A time, triggered by certain specific events, during which you and your dependents must be permitted to sign up for coverage under a group health plan. Employers and group health insurers must make such a period available to employees and their dependents when their family status changes or when their health insurance status changes. Special enrollment periods must last at least 30 days. HIPAA requires Group Health Plans to offer special enrollment rights to certain uninvolved employees and dependents when they experience a mid-year loss of other coverage and when there is a mid-year adoption, birth or marriage.

Special Enrollment Period
A time, triggered by certain specific events, during which you and your dependents must be permitted to sign up for coverage under a group health plan. Employers and group health insurers must make such a period available to employees and their dependents when their family status changes or when their health insurance status changes. Special enrollment periods must last at least 30 days. Enrollment in a health plan during a special enrollment period is not considered late enrollment. See also Late Enrollment.

Spouse
Under the Defense of Marriage Act (Public Law 104-199, September 21, 1996). "Spouse" means an individual who is a husband or wife pursuant to a marriage that is a legal union between one man and one woman, including common law marriage between one man and one woman in States where it is recognized.

State Continuation Coverage
A program similar to COBRA for people who used to receive health benefits from a small employer with fewer than 20 employees.

Stop-Loss Insurance
Coverage purchased by self-funded medical plans or plan sponsors to cover claims over a certain amount, on an individual or aggregate basis. The coverage protects the employer in most situations and does not make the medical plan itself insured for purposes of ERISA. Also called “excess insurance” or “reinsurance”.

Supplemental Security Income (SSI)
A program providing cash benefits to certain very low income disabled and elderly individuals. When you qualify for SSI, you generally also qualify for Medicaid. In addition, Medicaid coverage often continues for a limited time if your income increases so that you no longer qualify for SSI.

Temporary Assistance for Needy Families (TANF)
A program that provides cash benefits to low income families with children. When you qualify for TANF, you generally also qualify for Medicaid. In addition, Medicaid coverage often continues for a limited time or longer if you no longer qualify for TANF.

U.S. Department of Labor
A department of the federal government that regulates employer provided health benefit plans. You may need to contact the Department of Labor if you are in a self-insured group health plan, or if you have questions about COBRA or the Family and Medical Leave Act.

Waiting Period
The time you may be required to work for an employer before you are eligible for health benefits. Not all employers require waiting periods. Waiting periods do not count as gaps in health insurance for purposes of determining whether coverage is continuous. If you employer requires a waiting period, your pre-existing condition exclusion period begins on the first day of the waiting period.

Cobra Insurance California

Cobra Insurance California
Cobra Insurance California

1. Cobra Insurance Services
19002 La Puente Rd, West Covina, CA - (626) 839-9599

2. Employer Concepts Insurance Services Inc
5 Corporate Park # 170, Irvine, CA - (949) 579-9681

3. Cobra Insurance Services
2011 W Pacific Ave, West Covina, CA - (626) 480-0022

Cobra Insurance Coverage Cost

Cobra Insurance Coverage Cost
Cobra Insurance Coverage Cost

- Premiums vary by policy, but a qualified beneficiary will not pay more than 102% of the cost for similarly situated individuals.

- COBRA premiums may be increased if the cost of the plan increases but must be fixed in advance of each 12 month cycle.

- The plan must allow you to pay monthly, weekly, or quarterly.

- The initial premium must be paid within 45 days of election.

- COBRA beneficiaries remain subject to the rules of the plan and therefore must satisfy all costs related to the plan i.e. copayments and deductibles, and are subject to all limits.

Cobra Insurance Wikipedia

Cobra Insurance Wikipedia

Cobra Insurance Wikipedia

Cobra Insurance Wikipedia Subsidy is as follows.

"Only 10% of Americans eligible for COBRA insurance in 2006 used it, many because they were unable to afford to pay the full premium after their job loss.

The version of the American Recovery and Reinvestment Act of 2009 passed by the House of Representatives includes a 65% subsidy for COBRA-enabled insurance for up to 12 months after losing a job, or 9 months if the loss was in the period retroactive to September 2008. As of January 30, 2009, the Senate was still considering the bill."

Cobra Insurance Extension

Cobra Insurance Extension
Cobra Insurance Extension

There are two federal laws that can be used to continue health insurance once your COBRA Continuation Coverage ends. Both provide access to health insurance without having to prove that you are “insurable.”

1. If you leave work due to disability

COBRA was amended to allow people, who had to stop work due to disability, to extend the time they can keep COBRA Continuation. Under this law, someone who qualifies may stay on their employer’s COBRA Continuation until they become eligible for Medicare, which is normally 29 months after they leave work due to disability.

However, to qualify for this extension of COBRA, you must meet several requirements:

- You must apply for Social Security Disability Insurance (SSDI) benefits.

- Social Security must approve your benefits during your initial 18 month COBRA period.

- The Onset Date of your disability, must be within 60 days of the start of your COBRA coverage.

- Finally, you must provide a copy of your Social Security Notice of Award letter to your COBRA administrator within 60 days of receiving it AND within 18 month COBRA period.

Now, for a practical look at each of these requirements:

- COBRA is letting Social Security decide who was disabled when they stopped working with this requirement. If you didn’t pay into Social Security because you were a public school teacher or government employee and are therefore not “financially eligible”, Social Security is still required to review your medical records to see if you are disabled enough to qualify for benefits if you were eligible. You need to tell them you are applying to extend COBRA when you first apply.

- The SSDI claim must be approved during the original 18 months of COBRA. If there is a denial and you have to wait to appeal before an Administrative Law Judge, and it goes beyond 18 months, you lose your chance to extend COBRA even if your claim is later approved.

- Social Security will determine the onset date of your disability. That is the date they believe you became disabled and the date from which they start counting the five-month waiting period of benefits. Even if the approval letter comes in the last few months of your COBRA Continuation, you can still qualify for the extension if the Onset Date given in your approval letter is within 60 days of the COBRA Qualifying Event.

- This rule has unfortunately cost many people their right to stay on COBRA. The COBRA administrator is usually your old employer but they may have contracted with an outside firm to administer their COBRA people. A good rule of thumb is that the copy of the Social Security Notice of Award letter should go to the same place that you pay your COBRA premiums to. Ask for a receipt or otherwise confirm that the letter was received.

This is a good way to stayed insured since it allows you to stay on your employer’s health insurance plan until you become eligible for Medicare. The primary drawback is that during the months after the first 18 months of COBRA, the employer can (and will) charge you the actual premium PLUS 50%. For example, if you were paying $200 per month on COBRA, the extended months will cost $300 per month.

2. If you’re COBRA ends and you don’t qualify for the disability extension

A 1996 federal law, called HIPAA, provides that people losing their employer’s coverage after COBRA expires, have a one-time opportunity to move to a broad benefit individual health insurance plan.

The rules on qualifying for individual coverage are not complicated:

- You must continue your COBRA Continuation as long as possible. You cannot drop COBRA at any time and move to the individual plan.

- You must have been continuously covered under health insurance for at least 18 months. That’s easy, since COBRA itself lasts 18 months or longer.

- You must sign up for the individual coverage within 63 days of the end of your COBRA insurance.


The Coverage

The plans you will have a guaranteed right to buy will change from state to state. Some states require that everyone purchase coverage from one central plan. Other states require every insurance company writing individual health insurance to carry “HIPAA coverage plans” and each person can go with the company of their choice. Either way, the coverage must be broad, and will almost always include prescription drug coverage. Companies offering “HIPAA” plans must offer their two most popular health plans based on premiums written.

The Cost

The insurance lobby wasn’t totally asleep when this law was passed, so there are no limits on what carriers can charge. It will definitely cost you more than buying coverage on the open market. The cost will also vary dramatically by location.

How It Works

Once you’re COBRA Continuation coverage ends, the insurance company or administrator is required to send you what is called a “Certificate of Creditable Coverage” which is usually simply a letter confirming the starting and stopping dates of your coverage with them.

Upon presenting that letter to the HIPAA plan or carrier, the plan is required to let you purchase the coverage.

Thanks to these two laws, now, if you ever become insured under an employer health plan, you will be permitted to maintain health insurance indefinitely, even after your employment terminates.

Cobra Benefits Cost

Cobra Benefits Cost
Cobra Benefits Cost

The Cost Of COBRA Was 145% Of Active Employee Cost, According To Spencer's 2006 COBRA Survey.

Average claims costs for COBRA continues exceeded costs for active employees by about 45%, according to the 15th nationwide survey of employers’ and plan administrators’ COBRA experience, conducted by Spencer’s Benefits Reports. The 122 companies responding to the 2006 survey administered COBRA for 11,949 former employees and 1,421 dependents that elected the continued coverage.

The survey, which collected information for the 2005 plan year, found that 10.1% of employees and dependents became eligible for COBRA continuation of coverage, and 26.6% of those eligible actually elected the health care coverage offered. The average annual health care cost for the companies that reported costs averaged $6,831 per employee/participant. This is 19% higher than costs two years ago ($5,721 in 2004). COBRA costs in the 2006 survey averaged $9,914 per year, 19% higher than two years ago.

The 2006 COBRA survey also identified the following primary difficulties in the continuation of coverage law:

- cost of the coverage, both for the employer and the employee, with concerns for affordability by the employee the top concern for 2006;
- Complexity of rules and laws;
- communicating the plan to participants and beneficiaries; and
- collecting premium payments.

The responses were notable for 2006 in that they continued at least one trend set in 2002. More responses than ever viewed the cost of COBRA as too high from the employee’s perspective.

Continuing the trend identified in previous Spencer surveys, costs for COBRA beneficiaries outstripped the costs for active employees. Also consistent with previous surveys, COBRA costs varied radically and unpredictably from employer to employer. Of the companies that could compare COBRA costs and active employee costs, 13% reported COBRA costs that were lower than active employee costs (25% in 2004). About 74% of the companies had COBRA costs between 100% and 200% of active employee costs (52% in 2004), and 13% had COBRA costs that were more than two times active employee costs (23% in 2004).

Cobra Insurance Rights

Cobra Insurance Rights
Cobra Insurance Rights

If you've lost your job, don't panic yet about losing your health coverage, too. You could be eligible for the continuation of your benefits.

A federal law known as COBRA (short for the Consolidated Omnibus Budget Reconciliation Act of 1985) provides a vital bridge between health plans for qualified workers, their spouses and their dependent children when their health insurance otherwise might be cut off. Because of that security, COBRA has been hailed as a much-needed safety net for families in the midst of crisis, such as unemployment, divorce or death.

Under COBRA, if you voluntarily resign from a job or are terminated for any reason other than "gross misconduct," you are guaranteed the right to continue your former employer's group plan for individual or family health care coverage for up to 18 months, at your own expense. In many cases, your spouse and dependent children also are eligible for COBRA coverage, sometimes for as long as three years. However, individual plans -- that is, plans you buy on your own, rather than through work or an association -- are not subject to COBRA law, and once you lose that coverage, you won't be able to get an extension under COBRA.

Are you eligible for COBRA?

In general, three groups of people, known as beneficiaries, are eligible for COBRA coverage: employees or former employees in private business, their spouses and their dependent children.

One of several types of "qualifying events" must occur in order to trigger COBRA, as outlined in the chart below. You then are eligible to buy COBRA for the maximum coverage period as determined by your beneficiary status and the qualifying event. Remember: You don't have to stay on COBRA the whole time -- nor will you always be able to -- if different coverage comes along.

COBRA eligibility also extends to workers in state and local government, as well as to workers classified as independent contractors. However, the law grants an exemption to the District of Columbia, federal employees, certain church-related organizations and firms employing fewer than 20 people. The IRS has said that employers must figure part-time workers into their employee total to determine if they can claim exemption.

Even if you work at a small company that is exempt from federal law, you might not be completely out of luck. Many states have adopted their own laws, sometimes known as "mini-COBRA," that often grant broader rights in determining eligibility for coverage. Check with your state insurance department to find out if you are entitled to continued health-care coverage under a state COBRA plan.

Employers with self-funded health plans (generally large corporations) are exempt from state regulation of their plans, but employers who buy coverage through outside insurers (generally smaller businesses) are subject to such laws.

Keep in mind, too, that you must actually be covered under an employer health plan to be eligible for COBRA. If your employer has more than 20 workers but doesn't offer health coverage, or offers coverage to only certain groups of employees and you're not one of them, you won't be eligible for COBRA even if one of the qualifying events occurs -- nor will your spouse or children be eligible.

Your COBRA coverage ends when:

- You reach the last day of maximum coverage.

- Premiums are not paid on a timely basis.

- The employer ceases to maintain any group health plan.

- The employer goes out of business.

- You obtain coverage through another employer group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of a beneficiary.

- A beneficiary is entitled to Medicare benefits.

Paying for COBRA

Eligibility isn't the only issue you should consider when it comes to COBRA. Cost is another major factor.

When you're on COBRA, no longer will your employer be picking up a big chunk of the monthly premiums. You'll be responsible for paying the full amount, plus an administrative fee of up to 2%. You'll have to weigh your ability -- and desire -- to pay the extra expenses against your and your family's need for health coverage and the financial dangers of going without it.

The fact is, though, that if you have children, you should have health insurance to help pay for all those routine check-ups and immunizations they need, plus the unexpected emergencies. One broken wrist could set you back thousands of dollars.

And how are you feeling? If you have ongoing medical problems or need prescriptions frequently, you probably should opt for COBRA not only because the insurance coverage will help defray your out-of-pocket costs, but also because it will ensure that you don't inadvertently lock yourself out of the health-insurance market.

People who have "pre-existing conditions" -- meaning medical problems that exist before you buy a policy -- find it much more difficult to buy individual health coverage because their policies can often be "medically underwritten." That is, insurers can consider the health of the applicants when deciding whether to insure someone. They could reject you for coverage completely or exclude coverage of your existing condition -- which goes against the very reason you need health insurance (some states, though, like Washington, ban that practice, and federal law forbids all group health plans from medically underwriting you).

If you plan to skip COBRA -- because it's expensive or you're hoping to find another job that offers group health insurance -- think again. You need to consider what could happen if your job searches drags on longer than you expected, you're diagnosed with a chronic or serious illness, or, if you're a woman wanting to start a family, you become pregnant. If you create a gap in your coverage of more than 63 days, you'll lose your health insurance rights under the federal HIPAA law (The Health Insurance Portability and Accountability Act).

HIPAA guarantees that people who have continuous health coverage, without a gap of more than 63 days, can't be denied insurance even if they have a pre-existing condition, such as diabetes. So if you forgo COBRA and wind up with a three-month gap in your coverage, you would lose your HIPAA protection when you later decide to buy insurance. This could lead to serious financial consequences.

Let's say a 27-year-old woman loses her job, but decides not to elect COBRA. Sixty-four days pass and she's still uninsured and jobless. A doctor diagnoses cancer. Now she has a pre-existing condition and her 60-day time limit for electing COBRA has expired. It's also been more than 63 days since she's had continuous group health insurance. No individual insurer will issue her a policy that will cover her cancer treatment, if she can get individual health insurance at all. If she does find a job that offers her health insurance, she may have to sit out a waiting period of up to 12 months before that plan will cover any cancer treatment.

If you have no pre-existing conditions and decide against COBRA, you can still consider buying individual insurance or even a short-term major medical policy to tide you over until you land a new job with health benefits.

Your coverage offered under COBRA must be identical to the coverage you had before. "An employer can't allow employees to choose a less-expensive plan," says Paul Fronstin, a senior research associate with the Employee Benefits Research Institute. However, employers can -- but are not required to -- give you the option of dropping such "noncore" benefits as dental and vision care. On the other hand, if you were covered by, say, three different health plans at the same time (one for hospitalization, prescriptions, medical, etc.), you have the right to elect continuing coverage in any or all of them.

Additionally, if your former employer changes its health insurance plan for its current employees, you are entitled to receive benefits under the new plan, although the benefits may change.

The rules for beginning COBRA


Both you and your employer must follow proper procedure to initiate COBRA, or else you could forfeit your rights to coverage.

The employer must notify the health plan administrator within 30 days after an employee's death, job termination, reduced hours of employment or eligibility for Medicare.

In cases of divorce, legal marital separation, or a child's loss of dependent status, it is your or your family's responsibility to notify the health plan administrator within 60 days of the event.

Once notified, the plan administrator then has 14 days to alert you and your family members -- in person or by first-class mail -- about your right to elect COBRA. The IRS gets tough here: If the plan administrator fails to act, he or she can be held personally liable for breaching their duties.

There are two exceptions to the notification rule, if the plan allows them: First, the time limit for both notification periods can be extended; and second, employers may be relieved of the obligation to notify plan administrators that the employees quit or reduced their work hours. It is then up to the plan administrator to determine if a qualifying event has occurred. You should find out in advance what your health plan allows.

You, your spouse and your children have 60 days to decide whether to buy COBRA. This election period is counted from the date your eligibility notification is sent to you or the date that you lost your health coverage, whichever is later. Your COBRA coverage will be retroactive to the date that you lost your benefits (as long as you pay the premium).

During the election period when you have to choose whether to buy COBRA, you might initially decide not to, which means you waive your right to coverage. However, as long as the election period hasn't expired, you can change your mind and revoke your waiver, and COBRA coverage would then start on the day the waiver was revoked. Bear in mind that if you visit a doctor during the period you initially waived COBRA, you will not be reimbursed for that claim even if you later decide to buy COBRA. In this case, COBRA is not retroactive to the date you lost your employer-sponsored plan.

Here are a few other things you should keep in mind:

Premium payments
After you elect COBRA, you have to pay the first premium within 45 days. And that first premium is likely to be high because it covers the period retroactive to the date coverage ended through your employer. Successive payments are due according to health-plan requirements, but COBRA rules allow for a 30-day grace period after each due date for payment.

Short payment rule
If your COBRA payment is short by an "insignificant amount" -- either 10% or $50, whichever is the lesser of the two -- an employer must accept the short payment as payment in full, or notify you of the deficiency and allow you another 30 days from the date that you receive the notification to correct the deficiency.

Extensions
Although COBRA sets specific time limits on coverage, there is nothing stopping the health plan from extending your benefits beyond the coverage period.

Notification rights
The U.S. Department of Labor has jurisdiction over issues involving notification of private-sector employees about COBRA coverage. Employers who fail to comply with the notification rules face fines of up to $110 for every day that no notice is sent after the deadline. In addition, the IRS can assess an excise tax against any company that does not comply with COBRA regulations.

Life insurance
COBRA makes no provisions for life insurance.

New workers
Newly hired employees must be given an initial general notice about their COBRA rights.

Plan description
COBRA information must be contained in the summary of the health-plan description employees must receive when they are new to the plan.

Switching plans
If your employer offers an open enrollment period to active employees and you're on COBRA, you must also be given the option to switch plans during that time. You may also add new dependents (a newborn, newly-adopted child, or new spouse) if your employer offers this option to active employees.

Conversion plans
If the health plan offers the option of converting from a group plan to an individual policy under COBRA, you must be given that option and allowed to convert within 180 days before COBRA ends. But you'll pay individual, not group, rates, and switching to individual coverage could weaken any HIPAA protections you have.

Moving
If you relocate out of your COBRA health plan's coverage area, you will lose your COBRA benefits; the employer is not required to offer you a plan in your new area.

Premium costs
Your premiums can be increased if the costs of the health plan increase for everyone at the workplace, but generally they must be fixed in advance of each 12-month cycle. The plan must also allow you to pay premiums on a monthly basis if you want.

Premium notices
Neither the health plan nor the employer is required to send you monthly premium notices, so make sure you pay attention to due dates.

Disability
People eligible for Social Security disability benefits may receive COBRA coverage for 29 months.

Sticker shock: For some, COBRA still proves elusive

The cost of the monthly premiums for COBRA can come as quite a surprise if you're accustomed to your employer picking up most of your health insurance tab via pretax paycheck deductions. When you opt to buy COBRA, you must pay the full premium amount -- which can be a hefty monthly sum, even for group health coverage. And don't forget to add as much as 2% on top of that for the administrative fees.

"For a family, you figure COBRA coverage is going to be $400 or $500 a month instead of $40 or $50 a month. And in most cases, they're not even getting a tax break anymore," says Paul Fronstin, a senior research associate with the Employee Benefits Research Institute (EBRI), a Washington-based nonprofit, nonpartisan organization that conducts research about employee benefits.

For single people, you can expect to pay upward of $200 a month. For disabled beneficiaries who receive an additional 11 months of coverage after the initial 18 months, the premium for those extra months may be increased to 150% of the plans total cost of coverage.

It's not surprising, then, that a 1996 survey conducted by Charles D. Spencer & Associates, covering 1.42 million workers at about 200 firms, concluded that just 28% of eligible people opted for COBRA.

Still, for someone who’s only other option is getting an individual health policy or who could wind up in a state's "high-risk pool" -- generally considered insurance of the last resort for people who can't get coverage in the open market -- COBRA is generally less expensive.

And keep in mind that you can take a tax deduction on your medical and dental expenses that exceed 7.5% of your adjusted gross income.

Cobra Insurance FAQ

Cobra Insurance FAQ
Cobra Insurance FAQ

What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires most employers with group health plans to offer employees the opportunity to continue temporarily their group health care coverage under their employer's plan if their coverage otherwise would cease due to termination, layoff, or other change in employment status (referred to as "qualifying events").


How long must COBRA continuation coverage be available to a qualified beneficiary?

- Up to 18 months for covered employees, as well as their spouses and their dependents, when workers otherwise would lose coverage because of a termination or reduction of hours.
- Up to 29 months is available to employees who are determined to have been disabled at any time during the first 60 days of COBRA coverage and applies as well to the disabled employee's nondisabled qualified beneficiaries.
- Up to 36 months for spouses and dependents facing a loss of employer-provided coverage due to an employee's death, a divorce or legal separation, or certain other "qualifying events".


What is a qualifying event?

The qualifying event requirement is satisfied if the event is (1) the death of a covered employee; (2) the termination (other than by reason of the employee's gross misconduct), or a reduction of hours, of a covered employee's employment; (3) the divorce or legal separation of a covered employee from the employee's spouse; (4) a covered employee becoming entitled to Medicare benefits under Title XVIII of the Social Security Act; or (5) a dependent child ceasing to be a dependent child of the covered employee under the generally applicable requirements of the plan and a loss of coverage occurs.


Who is a Qualified Beneficiary?

Under the statute, a qualified beneficiary is someone who "is a beneficiary under the plan" (i.e., is covered under the plan) immediately prior to the qualifying event and who is:

- The spouse or dependent child of a covered employee.
- A covered employee (but only if the qualifying event is a termination or reduction in hours of the covered employee's employment.


Are Newborns and Adopted Children considered "qualified beneficiaries"?

Yes. A child who is "born to or placed for adoption with the covered employee during the period of continuation coverage under [Code §490B, the Code's COBRA provisions]" is also a qualified beneficiary regardless of whether the qualifying event occurred before, on, or after such date if they are enrolled within 30 days of birth or adoption.


What is the definition of a Covered Employee?

Covered employee "means an individual who is (or was) provided coverage under a group health plan by virtue of the performance of services by the individual for 1 or more persons maintaining the plan. This definition is expansive and includes retirees, independent contractors, self-employed persons and partners of a partnership.


What is the definition of Dependent Child?

COBRA does not define "dependent child." Who is a dependent child is determined by the terms of the group health plan.


What Plans Are Subject to COBRA?

Virtually all group health plans maintained by employers for their employees are subject to Cobra’s provisions, include group health plans of corporations, partnerships, and tax exempt organizations, state and local governments. This also includes Health Care Spending Accounts.


What Plans Are Not Subject to COBRA?

Small Employer Plans:
Small employer plans are entirely exempt from COBRA. If all employers maintaining the plan normally employed fewer than 20 employees on a typical business day during the preceding calendar year, the plan falls within the "small employer plan exception"

The Federal Government's Group Health Plan:
The Federal government's group health plan is not subject to COBRA. However, a separate law, the Federal Employees Health Benefits Amendments Act of 1988 requires the Federal government to offer its employees continuation coverage effective January 1, 1990.

Certain Church Plans
Certain church plans also are not subject to COBRA. The IRS has concluded that a plan for employees of an institute of higher learning under church auspices was a church plan, and that plan was accordingly not subject to COBRA.


What is the definition of Group Health Plan?

Under the COBRA statute the term "group health plan" is defined in Code § 5500 (b)(1) as follows: a plan (including a self-insured plan) of, or contributed by, an employer (including a self-employed person) or employee organization to provide health care (directly or otherwise) to employees, former employees, the employer, other associated or formerly associated with the employer in a business relationship, or their families.


Can a qualifying event result from a voluntary termination of employment?

Yes. Apart from gross misconduct, the facts surrounding a termination or reduction of hours are irrelevant. It does not matter whether the employee voluntarily terminated or was discharged.


What triggers the obligation to offer COBRA coverage?

COBRA requires employers to offer a COBRA election to qualified beneficiaries when there is: (1) a triggering event; and (2) the triggering event causes (or will cause) a loss in plan coverage that occurs within the maximum coverage period for that event. When both elements (1) and (2) exist, there is a COBRA "qualifying event." A COBRA "qualifying event" is a specified triggering event, "which, but for the continuation coverage required (by COBRA), would result in the loss of coverage of a qualified beneficiary." An event is a qualifying event if it (a) is one of the specified events ("triggering events"), (b) causes the covered employee, spouse or dependent child to lose coverage and {c} occurs while the plan is covered by COBRA. If a qualified beneficiary experiences a triggering event, but there is no loss in coverage attributable to the triggering event, there is no qualifying event and COBRA coverage does not need to be offered.


What Specific Events ("Triggering Events") can be Qualifying Events?

The statute specifies six triggering events that, if they result in a loss of coverage, can be qualifying events:

- Death of the covered employee;
- Voluntary or involuntary termination of the covered employee's employment other than by reason of gross misconduct (note that a retirement is considered a termination of employment);
- Reduction in hours of the covered employee's employment;
- Divorce or legal separation of the covered employee from the employee's spouse;
- Dependent child ceasing to be a dependent child under the generally applicable requirements of the plan; and
- An employer's bankruptcy, but only with respect to health coverage for retirees and their families.


What events are not considered Triggering Events?

If an employer terminates a group health plan or amends it to reduce coverage, neither the termination nor the amendment is a qualifying event. The following events are not considered triggering events:

- A change in insurance carriers. Replacement of one insured health plan with a less generous plan is not a qualified event.
- Tendering a resignation. Only when an employee actually terminates does a qualifying event occur.
- Filing for divorce. The entry of the decree is the triggering event; however, if legal separation precedes the divorce and results in a loss of coverage, then the legal separation will become the triggering event.
- Employee drops coverage for spouse or dependents.
- Employee's resignation from Union.
- Termination of Employment After Insurer Cancels Group Health Plan.


What are the two mandatory items that must be sent to an employer to its employees regarding COBRA?

The initial notice and the qualifying notice are the most two important COBRA notices. They communicate to plan participants and to qualified beneficiaries their COBRA rights and obligations generally (the initial notice) and with reference to a specific qualifying event (qualifying event notice). The mishandling of these notices (either because the notices are not delivered or their content is deficient) is a significant source of litigation and liability for plans.


When must the Initial Notice be sent to Covered Employees and Spouses?

The initial notice must be sent by the "group health plan" to the covered employee and spouse upon first becoming covered by a group health plan.


What is the purpose of the Initial COBRA Notice?

The Initial COBRA notice informs the plan participants (and his or her spouse if any) their rights under COBRA "at the time of commencement of the coverage under the plan."


Who must provide the Initial Notice?

The statute requires the "group health plan" to provide notice. The definition of group health plan, however, does not identify any particular party. Most commentators have assumed that the plan administrator has the obligation to provide the initial notice, because ERISA § 502 {c}(1) makes the plan administrator liable for a $110 per day for failure to distribute the initial notice. The Department of Labor assigns the responsibility to the plan administrator.


What is the Qualifying Event Notice regarding COBRA?

Upon the occurrence of a qualifying event and notice to the plan administrator of that event, the plan administrator must send a qualifying event notice to each qualified beneficiary advising them of their rights under COBRA and offers them the right to elect COBRA.


What is contained in the Qualifying Event Notice?

The qualifying event notices typically consists of
(a) a cover letter explaining to the qualified beneficiary his or her COBRA rights and obligations, as well as all election, payment and notice deadlines;
(b) an election form;
(c) a premium schedule; and
(d) an ACH notice.


When must the employee or qualified beneficiary notify the plan administrator of any triggering events?

The covered employee or qualified beneficiary must notify the plan administrator within 60 days of the occurrence of these triggering events:

- Divorce or legal separation of covered employee from his or her spouse; and
- Dependent child ceasing to be a dependent under the plan.

The proposed regulations expand this rule to provide that the notice period is 60 days after the triggering event or, if later, the date coverage would be lost. "If the notice is not postmarked and sent to the employer or other plan administrator [within the 60 day period], the group health plan does not have to offer the qualified beneficiary the opportunity to elect COBRA continuation coverage."


When must the Employer notify the Plan Administrator of COBRA qualifying events?

The employer "must notify the plan administrator…within 30 days…of the date of" the following qualifying events:

- Death of a covered employee;
- Termination or reduction of hours of the covered employee;
- The covered employee becomes entitled to Medicare; and
- The commencement of a bankruptcy proceeding of the employer

The "qualifying event" in this context means the date of the triggering event, not the date that coverage is lost.


When must the Qualifying Event Notice be sent to the Qualified Beneficiaries notifying them of their right to elect COBRA?

The plan administrator must notify "any qualified beneficiary" with respect to a qualifying event of his or her COBRA election rights within 14 days after it has been notified (by the employer or by a qualified beneficiary) that the qualifying event has occurred. If the plan administrator has not received notice that a qualifying event has occurred, they are not obligated to provide notice of COBRA election rights to the qualified beneficiary.


Within what time period does the Qualified Beneficiary have the option of electing COBRA?

A qualified beneficiary may elect COBRA coverage at any time within 60 days after the date plan coverage terminates, or, if later 60 days after the date of the notice to the qualified beneficiary from the plan administrator. The 60-day period permits a qualified beneficiary to "adopt a wait-and-see approach to continued coverage, and then elect if and when medical care is required during the election period. If the plan administrator has not sent the notice of qualifying event, the election period remains open. The 60 day period is a minimum.


Does each Qualified Beneficiary have Independent Election Rights under COBRA?

Yes. COBRA requires that "each" qualified beneficiary be entitled to elect COBRA coverage. If there is a choice among types of coverage under the plan, each qualified beneficiary is entitled to make a separate election among the different types at open enrollment.


What are the Premium Payment Deadlines regarding COBRA coverage?

A plan may not require any payment until 45 days after the qualified beneficiary's initial election. If a qualified beneficiary fails to make the initial premium payment within the 45-day period, the plan administrator may terminate the COBRA coverage. Thereafter, payments are due on the first of each month, subject to a 30-day grace period.


How do the COBRA continuation coverage requirements apply to Cafeteria Plans and other Flexible Benefit arrangements?


The provision of medical care through a cafeteria plan (as defined in Section 125) or other flexible benefit arrangement constitutes a group health plan. However, the COBRA continuation coverage requirements of section 162(k) apply to those medical benefits under the cafeteria plan or other arrangement that a covered employee has actually chosen to received. Furthermore, except in cases where the plan is exempt from HIPAA, COBRA need only be offered in cases where the participant has a positive balance at the time of termination and only for the remainder of the current plan year.

Cobra Insurance Eligibility

Cobra Insurance Eligibility
Cobra Insurance Eligibility

Three elements to qualifying for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) benefits. COBRA establishes specific criteria for plans, qualified beneficiaries, and qualifying events. These elements will determine the period of coverage.

1. Plans
Group health plans maintained by employers with 20 or more employees on more than 50% of their typical business days in the previous calendar year are subject to COBRA. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time.

2. Qualified Beneficiaries
A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event. Depending upon the event, the following individuals may be qualified beneficiaries: a "covered employee" (a term that includes active employees, terminated employees and retirees); a covered employee's spouse and dependent children; any child born to or placed for adoption with a covered employee during the period of COBRA coverage; agents; self-employed individuals; independent contractors and their employees; directors; political appointees; and elected officials.

3. Qualifying Events
"Qualifying events" are certain events listed in the COBRA law that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. (Click on "Standard Periods of Coverage," "Extended Periods of Coverage," and "Contracted Periods of Coverage" on the left navigation bar.) A plan, at its discretion, may provide longer periods of continuation coverage.

The qualifying events for covered employees are

- Voluntary or involuntary termination of employment for any reason other than "gross misconduct."
- Reduction in the number of hours of employment.

The qualifying events for spouses are

- Voluntary or involuntary termination of the covered employee's employment for any reason other than "gross misconduct."
- Reduction in the hours worked by the covered employee.
- Covered employee's becoming entitled to Medicare.
- Divorce or legal separation of the covered employee.
- Death of the covered employee.

The qualifying events for dependent children are the same as for the spouse with one addition

- Loss of "dependent child" status under the plan's rules.

Cobra Insurance Wiki

Cobra Insurance Wiki
Cobra Insurance Wiki

Cobra Insurance Wiki explained the purpose of Cobra as follows.

"As originally enacted, Title X of the Act provided that a qualifying employer will not be permitted to take a tax deduction for its health insurance costs unless its health insurance plan allows employees of the employer and the employee's immediate family members who had been covered by a health care plan to maintain their coverage if a "qualifying event" causes them to lose coverage. However, the legislation was subsequently amended to instead impose an excise tax upon an employer whose health plan fails to satisfy the applicable rules. A qualifying employer is generally an employer with 20 or more full time equivalent employees.[2]

Among the "qualifying events" listed in the statute are loss of benefits coverage due to (1) the death of the covered employee; (2) an employee loses eligibility for coverage due to termination or a reduction in hours as a result of resignation, discharge, layoff, strike or lockout, medical leave, or slowdown in business operations; (3) divorce or legal separation that terminates the ex-spouse's eligibility for benefits; or (4) a dependent child reaching the age at which he or she is no longer covered. COBRA imposes different notice requirements on participants and beneficiaries, depending on the particular qualifying event that triggers COBRA rights.

COBRA also allows for coverage for up to 18 months in most cases. If the individual is deemed disabled by the Social Security Administration, coverage may continue for up to 29 months. In the case of divorce, coverage may continue for up to 36 months.

COBRA does not apply, on the other hand, if employees lose their benefits coverage because the employer has terminated the plan altogether or if the employer has gone out of business.

COBRA does not, unlike other federal statutes such as the Family and Medical Leave Act (FMLA), require the employer to pay for the cost of providing continuation coverage. Instead it allows employees and their dependents to maintain coverage at their own expense by paying the full cost of the premium the employer previously paid, plus up to a 2% administrative charge (50% for the latter 11 months under the disability extension).

Employees and dependents can also opt for a lesser form of coverage, e.g., to choose continuation coverage under a plan that only covers the employee, but not his or her dependents, or that only provides medical and hospitalization coverage and does not pay for dental work, if those options are available to covered employees.

Employees and dependents lose coverage if they fail to make timely payments of these premiums. Employers are required to inform employees and dependents upon loss of coverage, in writing, by at least fifteen days before the coverage ceases."

Cobra Insurance Coverage Laws

Cobra Insurance Coverage Laws
Cobra Insurance Coverage Laws

Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (Cobra) health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise would be terminated.

Cobra contains provisions giving certain former employees, retirees, spouses and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available in specific instances. Group health coverage for Cobra participants is usually more expensive than health coverage for active employees, since usually the employer formerly paid a part of the premium. It is ordinarily less expensive, though, than individual health coverage.

The law generally covers group health plans maintained by employers with 20 or more employees in the prior year. It applies to plans in the private sector and those sponsored by state and local governments.{2} the law does not, however, apply to plans sponsored by the Federal government and certain church- related organizations.

Group health plans sponsored by private sector employers generally are welfare benefit plans governed by ERISA and subject to its requirements for reporting and disclosure, fiduciary standards and enforcement. ERISA neither establishes minimum standards or benefit eligibility for welfare plans nor mandates the type or level of benefits offered to plan participants. It does, though, require that these plans have rules outlining how workers become entitled to benefits.

Under Cobra, a group health plan ordinarily is defined as a plan that provides medical benefits for the employer's own employees and their dependents through insurance or otherwise (such as a trust, health maintenance organization, self-funded pay-as-you-go basis, reimbursement or combination of these). Medical benefits provided under the terms of the plan and available to Cobra beneficiaries may include:

- Inpatient and outpatient hospital care
- Physician care
- Surgery and other major medical benefits
- Prescription drugs
- Any other medical benefits, such as dental and vision care

Life insurance is not covered under Cobra.

Cobra Insurance Phone Number

Cobra Insurance Phone Number
Cobra Insurance Phone Number

The phone number of Cobra Insurance is 1-877-279-7959 (8am - 5pm CST).

Cobra Benefits Duration

Cobra Benefits Duration
Cobra Benefits Duration

- Disability Extension of 18-month Period of Continuation Coverage
- Second Qualifying Event Extension of 18-month Period of Continuation Coverage

Cobra Insurance Coverage Rules

Cobra Insurance Coverage Rules

Cobra Insurance Coverage Rules

Cobra Insurance Coverage Periods Rules

1.
a. Qualifying event - Termination of job, reduced hours
b. Beneficiary eligible for COBRA - Employee Spouse Dependent child
c. Maximum coverage time (months) - 18

2.
a. Qualifying event - Employee entitled to Medicare, Divorce or legal separation, Death of employee
b. Beneficiary eligible for COBRA - Spouse Dependent child
c. Maximum coverage time (months) - 36

3.
a. Qualifying event - Loss of dependent-child status
b. Beneficiary eligible for COBRA - Dependent child
c. Maximum coverage time (months) - 36


COBRA Coverage Ends

- The last day of maximum coverage.

- Premiums are not paid on a timely basis.

- The employer ceases to maintain any group health plan.

- You obtain coverage through another employer group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of a beneficiary.

- A beneficiary is entitled to Medicare benefits.


COBRA Things Keep Mind

- Premium payments
- Extensions
- Notification rights
- Life insurance
- New workers
- Plan description
- Switching plans
- Conversion plans
- Moving
- Premium costs
- Premium notices
- Disability

Cobra Benefits Resignation

Cobra Benefits Resignation

Cobra Benefits Resignation

If the employer has at least the equivalent of 20 full-time employees for at least 6 months or more, they will be required to offer Cobra to you if you resign or are terminated. The employer has 30 days of the date you leave the company to notify the benefit plans of status, and the plan has 14 days from when they receive notice to send the information pertaining to how to elect or decline Cobra to you. If you don't respond in writing by the deadline you will be assumed to have declined coverage. Once you receive the notice, you have a minimum of 60 days from the date of the letter to make a decision (some employers may grant a longer period, but most adhere to 60 days). If you do elect Cobra, you will need to pay the premium from the 1st of the month following your departure from the company through the month in which you elect (so possibly 3 months of premium upfront given the timeframe above). Also, as part of Cobra, you will be paying the full amount of the coverage (any employer contribution previously paid will not continue after you leave the company).

If you do elect Cobra, you will need to make sure your payments are timely - the due date is the 1st of the month, and you have until the end of that month to ensure your payment is received by the plan (ex. due date of Jan 1 - premium must be received by Jan 31). If your payment is not received by the end of the month, they will terminate your coverage for non-payment back to the first of the month in which your payment was due (using the example from above - if you payment didn't arrive by Jan 31 - your coverage would terminate as of 12:01 am on Jan 1). The plan is not required to send monthly billings so you will need to make sure you track your payments and their due dates.

Also, if you elect, but do not pay your premium, your coverage will be terminated. If you used the insurance during that time, the health care provider will be notified that your insurance isn't valid when they bill the insurance company, and then they will bill you for the full amount. If you go during the middle of the month, and then miss your payment at the end and the billing has already been received and benefits paid by the insurance company - the insurance company will have the right to come after you for the amount they paid to your health provider.

If you are concerned about the cost of Cobra and don't have a pre-existing condition, you may want to consider buying either temporary insurance (if you know you will be eligible on another plan soon) or an individual plan. The benefits may not be as good as your prior employer's plan, but the costs may be lower than Cobra. Try local agent, or go to a carrier's website direct to get a quote and see the benefit options available and estimated costs - note costs are subject to disclosure of your health and you'll need to state everything.

Cobra Benefits Dental

Cobra Benefits Dental
Cobra Benefits Dental

Delta Dental PPO Indemnity Plan - Cobra Benefits Dental Rates

1. Basic
Public Safety (R08),
Excluded (E99, except Teaching Associates),
Retired Annuitants
Single Person - $ 29.66
Two People - $ 56.03
Three or More - $112.52

2. Enhanced Level
Teaching Associates (R11),
CMA Operating Engineers (R10)
Single Person - $ 36.10
Two People - $ 68.29
Three or More - $140.76

3. Enhanced Level II
Physicians (R01),
Faculty (R03),
CSUEU (R02,05,07,09),
Academic Support (R04),
Skilled Crafts (R06),
Confidential (C99),
Management Personnel Plan (M80),
Executives (M98), FERP
Single Person - $ 44.68
Two People - $ 84.29
Three or More - $164.67


Delta Care USA - Prepaid Plan - Cobra Benefits Dental Rates

1. Basic
Public Safety (R08),
CMA Operating Engineers (R10),
Excluded (E99),
Teaching Associates (R11),
Retired Annuitants
Single Person - $ 19.01
Two People - $ 31.37
Three or More - $ 46.37

2. Enhanced
Faculty (R03),
CSUEU (R02,05,07,09),
Academic Support (R04),
Skilled Crafts (R06),
Confidential (C99),
Management (M80),
Executives (M98),
FERP
Single Person - $ 25.26
Two People - $ 41.70
Three or More - $ 61.66

Friday, February 20, 2009

Cobra Benefits Wiki

Cobra Benefits Wiki

Cobra Benefits Wiki

Cobra Benefits Wiki - The Consolidated Omnibus Budget Reconciliation Act of 1985 - Wikipedia, the free encyclopedia.

"The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a law passed by the U.S. Congress and signed by President Reagan that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. COBRA includes amendments to the Employee Retirement Income Security Act of 1974 (ERISA). The law deals with a great variety of subjects, such as tobacco price supports, railroads, private pension plans, disability insurance, and the postal service, but it is perhaps best known for Title X, which amends the Internal Revenue Code to deny income tax deductions to employers for contributions to a group health plan unless such plan meets certain continuing coverage requirements. The violation for failing to meet those criteria was subsequently changed to an excise tax.

Although this statute became law on April 7, 1986, its official name is the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub.L. 99-272, 100 Stat. 82). Because of the discrepancy between the official name of the Act and the year in which it was enacted, some government publications refer to the Act as the Consolidated Omnibus Budget Reconciliation Act of 1986. The Act is often referred to simply as "COBRA"."

Cobra Benefits Rules

Cobra Benefits Rules
Cobra Benefits Rules

According to Cobra Benefits Rules, Employees, Spouses, Dependents, Retirees and Partners are eligible for the benefits. Similarly, Cobra Benefits covered Health Care Plans, Medical Spending Accounts, Dental Plans, Vision Plans, Hearing Plans, Prescription Drug Plans, Alcohol & Substance Abuse Plans and Mental Health Plans.

Cobra Benefits NJ

Cobra Benefits NJ
Cobra Benefits NJ

The Cobra Benefits NJ related Continuation of New Jersey State Health Benefits Program Insurance Under COBRA under which employees are eligible if they enrolled in the State Health Benefits Program (SHBP) and School Employees' Health Benefits Program (SEHBP) may continue coverage under COBRA. Similarly, if the employee’s coverage ends due to following circumstances they are eligible for Cobra Benefits in NJ.

- Reduction in working hours
- Leave of absence
- Termination of employment for reasons other than gross misconduct

Similarly, spouses, civil union partners, or eligible same-sex domestic partners of employees enrolled in the SHBP or SEHBP also continue coverage under Cobra Benefits, in any plan that the employee is eligible for, if coverage ends due to following reasons.

- Death of the employee
- Divorce or legal separation of the employee and spouse
- Dissolution of a civil union or domestic partnership
- Election of Medicare as the employee's primary insurance carrier
- Also of the above top three reasons too.

The dependent children of employees in the SHBP or SEHBP may continue coverage under Cobra Benefits in any plan that the employee is eligible for, if coverage ends due to following reasons.

- Loss of dependent child's eligibility through independence, the attainment of age 23, marriage, or entering into a civil union or domestic partnership
- Death of the employee
- Election of Medicare as the employee's primary insurance carrier
- Also of the above top three reasons too.