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Cobra Health Insurance: Am I Covered?

December 31st, 2009

cobra-health-insurance-coverage.jpgIf you have lost your job or are moving in between jobs, you might be facing financial difficulties which can be exacerbated by any medical emergency that might occur during this period. Fortunately, there is a type of health coverage that is available between jobs to help you with your medical expenses. A federal law called COBRA (Consolidated Omnibus Budget Reconciliation Act) is a health insurance benefit program that was created with the intention of helping American employees and their dependents to maintain their health insurance for a temporary period of up to 18 months in cases where their employment status changes because of reasons such as layoffs, strikes, decreasing work hours, and other similar events. In some cases the period of health insurance given by the company may be extended from 18 months up to a maximum of 36 months.

What are the benefits of Cobra?

Overall, Cobra health insurance is an extended policy for employees which has many benefits. Some of these include:

  1. You get the group rate for health insurance, which is lower than the individual plans.
  2. You also get the coverage you had with your job, having the same network of doctors and providers. This offers continuity of care.
  3. You cannot be denied health insurance because of “pre-existing conditions” like you can in the private market for individual policies.

According to the law, Cobra must provide the same benefits as the coverage that the employee and any covered dependents received just prior to the qualifying event. In order to retain this coverage after the Cobra benefits period expires, the employee or the dependent must pay for the coverage. This includes the portion of the premium that was previously paid by the employer.

How do I receive Cobra insurance?

Plan participants and beneficiaries generally are sent an election notice in 14 days after the employer receives notice that a qualifying event has taken place. To retain this coverage, the employee or the dependent can decide in 60 days whether or not they want to receive Cobra continuation coverage. The initial premium must be paid in 45 days after electing to receive the coverage.

Am I covered under Cobra?

There are three main criteria for an employee, an employee’s spouse, and any dependent children of the employee to qualify for Cobra coverage.

  • You were an employee of a company having at least 20 employees for at least 50 percent of the year.
  • A “qualifying event” must have occurred.
  • You must have been covered under health insurance when you were employed and were participating in the plan that was sponsored by your employer before the qualifying event occurred.

The qualifying events for an employee include leaving a job voluntarily or involuntarily for any reason other than gross misconduct. A significant reduction of hours worked also counts as a qualifying event.

The qualifying events for the spouse of a covered employee include both of the above conditions plus the employee’s death, divorce, legal separation, or eligibility for Medicare.

The qualifying events for the dependent child of the covered employee include all of the same conditions as the spouse plus the loss of dependent child status according to the plan’s rules.

In some cases, the parent of a covered employee who is becoming entitled to Medicare, a retired employee, or the retired employee’s spouse and dependents are also covered by Cobra. If you or your spouse gives birth while you are covered by Cobra, your child is also covered.

When am I not covered by Cobra?

Cobra does not cover you if you were terminated from your employment because of gross negligence, misconduct (for example, sexual harassment) or some type of criminal activity. Also, if your employer reduces, changes, or abandons the sponsored health insurance plan during your employment, you will not qualify for Cobra.

If you have been dismissed from your employment for misconduct but you believe that you were not guilty of this, you have the option to request a hearing. During the period until the hearing is resolved, you are allowed to temporarily retain Cobra coverage. If you are found not guilty of the misconduct at the hearing you will be allowed to retain the coverage for the normal period of time afterward; otherwise the coverage will be terminated according to the usual rules.

This article on Cobra health insurance coverage was supplied to us by DailyArticle.com.

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