The Consolidated Omnibus Budget Reconciliation Act of 1985, more commonly known as COBRA, allows some former employees, retirees, spouses, former spouses and dependent children the right to temporary continuation of health coverage at group rates. COBRA coverage is only available when medical coverage is lost for specific reasons. It is usually more expensive than health coverage for employees since employers pay a part of the premium for active employees while COBRA participants usually pay the entire premium themselves. Roper Insurance can make an easy comparison for you to see whether a COBRA plan or individual health insurance would be better for you.
Group health plans for employers with 20 or more employees over the past calendar year may be subject to COBRA. Employees who leave their job for reasons other than gross misconduct or hours reduction, and their dependents, as well as retirees and their dependents can be eligible for COBRA benefits. The length of time they are eligible depends on the specific reasons for loss of coverage. Most COBRA coverage extends for 18 months, though certain qualifying events may extend coverage up to 36 months.
Employers must provide the potential COBRA participants and their beneficiaries with an election notice, giving them the opportunity to participate in a COBRA plan, within 14 of notice that a qualifying event has occurred. The plan participant then has 60 days to decide whether they will participate in COBRA, and then 45 days after that to pay their initial premium. COBRA coverage must be identical to what is offered to other employees at the company.
To use your COBRA benefits, you follow the rules of your health plan for the processing of claims. If your claim is denied you must be notified in writing within 90 after the claim is filed. The notice must include the reasons for denial, additional information needed and procedures for filing an appeal. Following that, you will have at least 60 days to appeal and must receive a decision within 60 days of appealing.