COBRA Option for Health Insurance After Job Loss
Many Americans have been laid off in recent months as a result of the COVID-19 pandemic. There have been expansions in unemployment benefits as a result, but not for health insurance coverage. Keeping health insurance in effect is an important consideration for those who have experienced job loss. One option for continuing the coverage offered by the prior employer is known familiarly as COBRA. This program provides the option for employees who have been laid off to remain on the prior employer’s group health insurance plan, despite the loss of their position.
What Is It?
COBRA is a federal program that was enacted by the government in order to allow employees and their dependents the right to remain on the prior group health plan. There are some eligibility requirements for this program. If those requirements are met, the employee may be able to remain on the group plan for up to 18 months, and sometimes longer.
When Does Eligibility Kick In?
There are triggering events that result in COBRA eligibility; those events include:
- Reduction in work hours
- Being fired or laid off
- Quitting a job
- Divorce (dependent would be eligible)
- Death (spouse of the deceased employee)
Which Employers Offer It?
COBRA usually applies to employers of at least 20 people that sponsor group health plans in the private sector. Many states have extended the requirements to businesses with fewer than 20 employees. Certain other requirements must be also met. COBRA also usually applies to employees of state and local governments. COBRA does not apply to those employed with church-related associations or the federal government.
Becoming Eligible for Continuing Coverage
The eligibility for COBRA partially depends on the health insurance policy that was offered by your prior employer. You must have been a participant in the plan while employed in order to be eligible for extended coverage. Additionally, the group health plan must still be in effect with your former employer. If the prior employer is no longer in business (a common scenario during the pandemic), the eligibility for COBRA coverage may not exist.
How Do I Know If I Am Eligible?
Within 90 days of having enrolled in your prior employer’s health plan, you should have received a notice of COBRA eligibility along with the Summary Plan Description (SPD).
What Happens After I Lose My Job?
With a few exceptions, within 60 days of a triggering event, the employee should receive a notice of eligibility for COBRA benefits that will include the following information:
- Instructions on how to enroll
- The enrollment deadline
- Enrollment and payment address information
- The coverage start date
- How long the coverage will last
- Amount of and the due date for monthly premiums – including any retroactive premiums dues
- Enrollee’s rights and obligations, which should include options to extend COBRA
- Information about early termination
How Long Do I Have to Enroll?
Former employees have at least 60 days to enroll – either from the date of receipt of the notice or the date on which you would lose coverage, whichever date is later. Each dependent has an individual right to enroll. So if one spouse decides not to elect continuing coverage, the other spouse still could.
What is Covered?
The COBRA policy should be the same as the prior plan in which the recipient was enrolled. Any subsequent changes made to that prior group policy will also apply to the COBRA coverage.
How Long Will My Benefits Last?
At least 18 months, but under certain circumstances, they can be extended for an additional 18 months.
Who Pays The Monthly Premiums?
In most cases, the former employee must pay the monthly COBRA premium to extend their health care benefits.
Here’s a short YouTube video explaining COBRA and Cal-COBRA, which is specific to California.
Sacramento Personal Injury Lawyer
I’m Ed Smith, and I have advocated on behalf of injured Sacramento residents for nearly four decades as a personal injury lawyer. If you have been injured due to someone else’s negligence and would like compassionate, free, and friendly advice, call (916) 921-6400 or (800) 404-5400. I also offer an online contact option.
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