Marcia Hultman

Cabinet Secretary

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Division of Insurance - COBRA


COBRA and State Continuation for Employers

 

Qualifying Event Qualified Beneficiaries Maximum Period of Continuation Coverage
Termination (for reasons other than gross misconduct) or reduction in hours of employment Employee
Spouse
Dependent Child
18 months*
Employee enrollment in Medicare Spouse
Dependent Child
36 months
Divorce or legal separation Spouse
Dependent Child
36 months
Death of employee Spouse
Dependent Child
36 months
Loss of 'dependent child' status under the plan Dependent Child 36 months

*link provides additional information on longer periods of COBRA

 

Frequently Asked Questions About COBRA**

 

General Questions about COBRA

What is COBRA and what does it do?
What is the federal government's role in COBRA?
What is a group health plan?
What group health plans are subject to COBRA?
What continuation protections are available to small employers?
Who pays for COBRA coverage?
Can I receive COBRA benefits while on FMLA leave?

 

Questions about Employee and Beneficiary Rights under COBRA

What notice is an employer required to provide to employees explaining COBRA rights?
What benefits must be covered under COBRA?
Who is entitled to continuation of coverage under a group health plan?
When is an employee eligible for COBRA continuation coverage?
Is a divorced spouse entitled to COBRA coverage from their former spouses' group health plan?
Who provides notice to the plan that a qualifying event has occurred?
When must qualified beneficiaries be notified?
How long after a qualifying event does an employee have to elect COBRA coverage?
Is notice of unavailability of continuation coverage required?
Can individuals qualify for longer periods of COBRA continuation coverage?
If I waive COBRA coverage during the election period, can I still get coverage at a later date?
What options are there to decrease benefits?
When can there be early termination of continuation coverage?
If I did not make the premium payment on time and my coverage was canceled, what can I do?
Are there alternatives for health coverage other than COBRA?
Are state continuation provisions applicable to employers of all sizes?

 

Questions about Qualifying COBRA Events

What are qualifying events?
When is a COBRA qualifying event notice required?

 

 

What is COBRA and what does it do?

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

COBRA requires group plans to offer continuation coverage to covered employees, former employees, spouses, former spouse, and dependent children when group health coverage would otherwise be lost due to certain specific events, referred to as qualifying events.

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What is the federal government's role in COBRA?

See webpage here.

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What is a group health plan?

A group health plan is any arrangement an employer establishes or maintains to provide employees or their families with medical care, whether it is provided through insurance, by a health maintenance organization, out of the employer's assets, or through any other means. "Medical care: for this purpose includes:

  • Inpatient and outpatient care;
  • Physician care;
  • Surgery and other major medical benefits;
  • Prescription Drugs;
  • Dental and vision care.

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What group health plans are subject to COBRA?

COBRA generally applies to all private-sector group health plans maintained by employers having at least 20 employees on more than 50 percent of their typical business days in the previous calendar year or by state or local governments. The law does not apply to plans sponsored by the Federal Government or by churches and certain church-related organizations.

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What continuation protections are available to small employers?

Those covered under group plans with less than 20 employees also have continuation protection under state law. The state law protections are designed to mirror COBRA.

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Who pays for COBRA coverage?

See webpage here.

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Can I receive COBRA benefits while on FMLA leave?

The Family and Medical Leave Act (FMLA) requires an employer to maintain coverage under any group health plan for an employee on FMLA leave under the same conditions coverage would have been provided if the employee had continued working. Coverage provided under the FMLA is not COBRA coverage, and taking FMLA leave is not a qualifying event under COBRA. A COBRA qualifying event may occur, however, when an employers obligation to maintain health benefits under FMLA ceases, such as when an employee taking FMLA leave decides not to return to work and notifies an employer of his or her intent not to return to work. Further information on the FMLA is available on the website of the U.S. Department of Labor's Wage and Hour Division at dol.gov/whd or by calling 866.487.9243.

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What notice is an employer required to provide to employees explaining COBRA rights?

See webpage here.

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What benefits must be covered under COBRA?

If you elect continuation coverage, the coverage you are given must be identical to the coverage currently available under the plan to similarly situated active employees and their families (generally, this is the same coverage that you had immediately before the qualifying event). You will also be entitled, while receiving continuation coverage, to the same benefits, choices, and services that a similarly situated participant or beneficiary is currently receiving under the plan, such as the right during open enrollment season to choose among available coverage options. You will also be subject to the same rules and limits that would apply to a similarly situated participant or beneficiary, such as co-payment requirements, deductibles, and coverage limits. The plan's rules for filing benefit claims and appealing any claims denials also apply.

Any change made to the plan's terms that apply to similarly situated active employees and their families will also apply to qualified beneficiaries receiving COBRA continuation coverage. If a child is born to or adopted by a covered employee during a period of continuation coverage, the child is automatically considered to be a qualified beneficiary receiving continuation coverage. You should consult your plan for the rules that apply for adding your child to continuation coverage under those circumstances.

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Who is entitled to continuation coverage under a group health plan?

A group health plan is required to offer COBRA only to qualified beneficiaries and only after a qualifying event has occurred.

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When is an employee eligible for COBRA continuation coverage?

An employee must have been enrolled in the employer's health plan when working, and the health plan must continue to be in effect for the active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would, except for COBRA continuation coverage, cause an individual to lose his or her health care coverage.

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Is a divorced spouse entitled to COBRA coverage from their former spouses' group health plan?

Under COBRA, participants, covered spouses and dependent children may continue their plan coverage for a limited time when they would otherwise lose coverage due to a particular event, such as divorce (or legal separation). A covered employee's spouse who would lose coverage due to a divorce may elect continuation coverage under the plan for a maximum of 36 months. A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation. After being notified of a divorce, the plan administrator must give notice, generally within 14 days, to the qualified beneficiary of the right to elect COBRA continuation coverage.

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Who provides notice to the plan that a qualifying event has occurred?

See webpage here.

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When must qualified beneficiaries be notified?

See webpage here.

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How long after a qualifying event does an employee have to elect COBRA coverage?

If you are entitled to elect COBRA coverage, you must be given an election period of at least 60 days (starting on the later of the date you are provided the election notice or the date you would lose coverage) to choose whether or not to elect continuation coverage.

Each of the qualified beneficiaries for a qualifying even may independently elect COBRA coverage. This means that if both you and your spouse are entitled to elect continuation coverage, you each may decide separately whether to do so. The covered employee or spouse must be allowed to elect on behalf on any dependent children or on behalf of all of the qualified beneficiaries. A parent or legal guardian may elect on behalf of a minor child.

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Is the notice of unavailability of continuation coverage required?

Group health plans may sometimes deny a request for continuation coverage or for an extension of continuation coverage, when the plan determines the requester is not entitled to receive it. When a group health plan makes the decision to deny a request for continuation coverage or a request for an extension from an individual, the plan must give the individual a notice of unavailability of continuation of coverage. The notice must be provided within 14 days after the request is received, and the notice must explain the reason for denying the request.

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Can individuals qualify for longer periods of COBRA continuation coverage?

See webpage here.

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If I waive COBRA coverage during the election period, can I still get coverage at a later date?

If you waive COBRA coverage during the election period, you must be permitted later to revoke your waiver of coverage and to elect continuation coverage as long as you do so during the election period. Then, the plan need only provide continuation coverage beginning on the date you revoke the waiver.

In addition, certain Trade Adjustment Assistance (TAA) Program participants have a second opportunity to elect COBRA continuation coverage. Individuals who are eligible and receive Trade Readjustment Allowances (TRA), individuals who would be eligible to receive TRA, but have not yet exhausted their unemployment insurance (UI) benefits, and individuals receiving benefits under Alternative Trade Adjustment Assistance (ATAA) or Reemployment Trade Adjustment Assistance (RTAA), and who did not elect COBRA during the general election period, may get a second election period. This additional, second election period is measured 60 days from the first day of the month in which the individual is determined eligible for the TAA benefits listed above and receives such benefit. For example, if an individual's general election period runs out and he/she is determined eligible for TRA (or would be eligible for TRA but have not exhausted UI benefits) or begin to receive ATAA or RTAA benefits 61 days after separating from employment, at the beginning of the month, he/she would have approximately 60 more days to elect COBRA. However, if this same individual does not meet the eligibility criteria until the end of the month, the 60 days are still measured from the first of the month, in effect giving the individual about 30 days. Additionally, a COBRA election must be made not later than 6 months after the date of the TAA-related loss of coverage. COBRA coverage chosen during the second election period typically begins on the first day of that period.

More information about the Trade Act is available at doleta.gov/tradeact/.

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What options are there to decrease benefits?

Any insurer offering continuation coverage, whether the continuation is pursuant to COBRA or any available state continuation, shall offer to all beneficiaries who are eligible the option to decrease benefits. The options shall include, at a minimum, those coverage options that would have been otherwise available to employees or dependents who initially enrolled into the coverage if the options decrease coverage or an insurer may offer a standardized plan to all those eligible for continuation that contains similar benefits to the beneficiary's prior coverage but at a higher deductible or other reduced benefit features.

If a person does not elect the option to decrease benefits and continues the group plan with no change in benefits, that person does not have the right to a reduction in benefits at a later date even unless it is an open enrollment period under the group plan and there are other group options available to active employees.

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When can there be early termination of continuation coverage?

A group health plan may terminate continuation coverage earlier than the end of the maximum period for any of the following reasons:

  • Premiums are not paid in full on a timely basis;
  • The employer ceases to maintain any group health plan;
  • A qualified beneficiary begins coverage under another group health plan after electing continuation coverage;
  • A qualified beneficiary becomes entitled to Medicare benefits after electing continuation coverage; or
  • A qualified beneficiary engages in conduct that would justify the plan in terminating coverage of a similarly situated participant or beneficiary not receiving continuation coverage (such as fraud).

If continuation coverage is terminated early, the plan must provide the qualified beneficiary with an early termination notice. The notice must be given as soon as practicable after the decision is made, and it must describe the date coverage will terminate, the reason for termination, and any rights the qualified beneficiary may have under the plan or applicable law to elect alternative group or individual coverage.

If you decide to terminate your COBRA coverage early, you generally will not be able to get a plan on the Federally Facilitated Marketplace outside of the open enrollment period.

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If I did not make the premium payment on time and my coverage was canceled, what can I do?

You may want to contact your plan and ask if they will reinstate your coverage; however, if your coverage was terminated for not making the payment within the grace period, the plan is not required to reinstate your coverage. If you believe your coverage was canceled inappropriately, you can contact an Employee Benefits Security Administration (EBSA) benefits advisor electronically at askebsa.dol.gov or call 866.444.3272 for assistance.

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Are there alternatives for health coverage other than COBRA?

See webpage here.

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Are state continuation provisions applicable to employers of all sizes?

See webpage here.

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What are qualifying events?

See webpage here.

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When is a COBRA qualifying event notice required?

See webpage here.

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**Resources used and quoted information for this webpage obtained from the FAQs on COBRA Continuation Health Coverage and An Employer's Guide to Group Health Continuation Coverage Under COBRA as issued by the U.S. Department of Labor Employee Benefits Security Administration (EBSA).

 

If you still have questions on COBRA:

Contact the Division of Insurance