How Long Does It Take For Cobra To Kick In
With all paperwork properly submitted, your COBRA coverage should begin on the first day of your qualifying event , ensuring no gaps in your coverage.
Legally, if your employer is subject to COBRA requirements, they must notify the organizations group health plan administrator within 30 days of your last day with your employer. At that point, the plan administrator then has 14 days to notify the former employee of their COBRA rights. Which is why the earlier you can begin this conversation with your companys HR department, the better if you know COBRA is the best choice for you, youll have more peace of mind knowing everything is all ready to go for your coverage to begin as soon as your existing coverage ends. And anything you can do on your end to help expedite the timeline to elect COBRA health insurance is always a win.
How Is My Cobra Affected If I Left Work Due To A Disability
If you leave work because of a disability, and the Social Security Administration finds you to be disabled and entitled to Social Security Disability Insurance or Supplemental Security Income , you are eligible for an additional 7 months of coverage from the previous maximum of 29 months of Federal COBRA for a total of 36 months. If you are receiving Social Security benefits and are disabled, you should be entitled to Medicare coverage at the end of the 36-month COBRA extension. Note: People who are disabled must notify their COBRA administrator of their determination of disability by SSA within 60 days of the disability determination notice in order to qualify for the 7-month extension.
Retiring Early Heres What You Need To Know About Cobra
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- Retiring Early? Heres What You Need To Know About COBRA
Any plan for bridging the gap between an early retirement and becoming eligible for Medicare at age 65 needs to include a discussion about COBRA health benefits. Legislators in Washington D.C. love a catchy acronym, and COBRA definitely fits the mold. Like the reptile COBRA is named after, failing to plan for healthcare expenses before Medicare coverage kicks in can sneak up and bite you when you least expect it. The struggle to find affordable and comprehensive health insurance prior to qualifying for Medicare can be difficult, and in certain situations, COBRA continuation coverage might be part of your best solution.
What Is COBRA?
When members of the Ways and Means Committee in the House of Representatives became concerned with reports of the growing number of Americans without health insurance coverage, they began to debate the COBRA Act, a way for employees to extend their health benefits in certain situations. COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, was ultimately signed into law by President Ronald Reagan in 1985.
Do I Qualify for COBRA?
To qualify for continuation of coverage under COBRA you must meet three elements:
- your employers group health plan must be considered covered by COBRA
- a qualifying event must occur
- you must be a qualified beneficiary
What Is Covered and How Long Does It Last?
How Much Does It Cost?
How To Offset Some of The Cost
What Are Some Cobra Alternatives
If you lose your employer-sponsored health insurance for any number of reasons and want to make sure you stay insured but dont want to do so through COBRA, you do have some options.
Loss of health insurance through your former employer means you are eligible for a Special Enrollment Period to buy your own insurance through the Health Insurance Marketplace in your state. With a Special Enrollment, you can shop for coverage even if youre outside of the standard Open Enrollment Period. During this Special Enrollment Period, youll have 60 days from the time your employer-provided benefits end to enroll in a health plan. Any insurance plan bought through the individual Marketplace will ensure you have coverage for essential health benefits. Plus it will meet the Affordable Care Acts requirements on limits on consumer spending, meaning that your deductibles, copayments, and out-of-pocket maximums cant exceed a certain amount in a given year. Depending on your financial status and the kind of plan you want, a Marketplace plan might be significantly cheaper than COBRA health insurance especially if you qualify for a premium tax credit to further reduce your premium costs.
Is My Health Insurance Subject To Cobra
Not all health plans have to offer COBRA continuation coverage. Your plan does if its a group plan offered through a private-sector employer with at least 20 full-time employees . COBRA also applies to most state and local government health plans.
You wont be eligible for COBRA if there is no health plan to continue because your employer went bankrupt. In addition, COBRA doesnt apply to health plans offered by the federal government, by churches, or by some church-related organizations.
For example, when I resigned from my nursing job with Florida Hospitals, I wasnt eligible for COBRA health insurance. This had nothing to do with me it was because my former employer, Florida Hospitals, is part of Adventist Healthcare, an organization run by the Seventh Day Adventist Church. Because Florida Hospitals is a church-related organization, its employee health plan isnt subject to the COBRA law.
But when I quit my job working at a Kaiser Permanente hospital, I was eligible for COBRA health insurance. Kaiser is a large, private-sector, non-church related employer. Kaisers health plan was subject to the COBRA law it had to offer me COBRA continuation coverage.
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How Should I Decide Whether To Continue My Coverage With Cobra
There are several factors to keep in mind when you’re deciding between COBRA and a self-purchased plan in the individual market:
- How much will the monthly premiums be? If you choose COBRA, you’ll normally pay the full cost of the health plan , plus a 2% administrative fee. If you choose to buy your own plan in the health insurance exchange, your premium will depend in large part on your income, since premium subsidy availability is based on income. Premium subsidies are larger than usual in 2021 and 2022, as a result of the American Rescue Plan.
- How much have you already spent towards your out-of-pocket maximum under your employer’s plan? If you switch to a self-purchased plan, you’ll have to start over at $0. This won’t be an issue if you’ve spent little or nothing on out-of-pocket costs so far in the year, but it could be the deciding factor if you’ve already met or nearly met your plan’s out-of-pocket maximum.
- Are your healthcare providers and other healthcare providers in-network with the available individual market plans in your area? Even if you switch to an individual market plan offered by the same insurer that provides or administers your employer’s plan, the provider network might be very different.
- Are any medications you take included in the formulary of the available individual market plans?
If you have the option to continue your health plan with COBRA, you don’t have to decide right away. You’ll have a 60-day window during which you can sign up for COBRA .
Is My Family Covered Under Cobra
Anyone who previously was covered by your employer-provided health insurance is eligible to be covered under COBRA insurance. So, if you, your spouse and children were all covered previously, the whole family is also eligible to continue this coverage by paying the applicable premiums in full under COBRA. And if the insured employee dies or if there is a divorce, likewise everyone who was once covered is legally entitled to continue their coverage by paying for this same insurance under COBRA.
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How Long Do You Have Health Insurance After Leaving A Job
How long do you have health insurance after leaving a job? If you quit your job without another one with benefits lined up, its worth wondering how long you have health insurance after you resign. After leaving a job, you can have health insurance for up to 36 months with the COBRA health insurance option.
Check Out Your Employers Health Insurance
If you were on your partners plan because it was more robust or cost-effective than the plan offered by your employer, time to circle back to your workplace plan. It may now be more cost-effective than staying on your exs plan through COBRA.
Getting divorced is considered a qualifying life event, so youll be able to enroll for health insurance outside of open enrollment.
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When Am I Not Covered By Cobra
You are not covered by COBRA if you were fired for gross misconduct. The COBRA law does not define gross misconduct. The case law that has developed around COBRA suggests that in order to be considered gross misconduct, the offense must be connected to your job, you had the capacity to understand that it was an offense and how bad it was, and the offense must be willful . Layoffs and forced reductions in hours worked are considered the same as being fired.
Anyone who was covered on your policy the day before the qualifying event is entitled to COBRA coverage.
How Long Will My Cobra Coverage Last
Although COBRA is temporary, youll have time to find another plan. Federal coverage lasts 18 months, starting when your previous benefits end. Some states extend medical coverage to 36 months. Check with your benefits manager to find out whether your state extends COBRA benefits.
Some benefits have a lifetime limit, but thats not the case with COBRA. Each time you enroll, youre entitled to the same benefits for the same period of time.
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Do I Have A Qualifying Event
What qualifies as a life event depends on whether youre the employee losing coverage, or a spouse or dependent of that employee. Your life-event will qualify you for COBRA coverage if youre the employee and:
- Youre laid off.
- Youre fired, but not for gross misconduct like stealing or assaulting the boss.
- Your employment is terminated for any other reason.
- Youre still employed, but your hours are reduced to a level that causes you to lose your health insurance benefit .
Your life-event will qualify you for COBRA coverage if youre the spouse or dependent of the covered employee and youre losing coverage because:
- One of the above things happened to the employee.
- The employee is becoming eligible for Medicare. If this is your situation, discover your options about losing your health insurance because your spouse is getting medicare?“
- The employee died.
- Youre getting divorced or legally separated from the employee.
- Youre a young adult and youre losing your dependent status with the health plan. If this is your situation, discover your options about turning 26 & getting kicked off your parents health insurance.
Health Insurance Options If Your Employer Closes Due To The Coronavirus Pandemic
The coronavirus global pandemic has left millions out of work and thousands of businesses shuttered. If your employer has closed or stopped offering a health care plan because of the COVID-19 outbreak, you probably won’t be eligible for COBRA continuing coverage. Instead, your best option might be to purchase coverage through your state’s health insurance exchange established by the Affordable Care Act. Losing employer-provided health insurance is one of the “qualifying events” that allows you to enroll in a plan on these exchanges. Find a plan that suits your needs at Healthcare.gov.
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How Do I Sign Up For Cobra Coverage
Once youve confirmed your COBRA eligibility and have decided that COBRA health insurance is the right fit for you, signing up is fairly straightforward.
The U.S. Department of Labor states that youll have 60 days to notify your insurance company of your qualifying event like leaving your job. You can work with your employer to find out how to best contact your insurance company with this notification. After you have notified your insurance company of your qualifying event, your insurance company than has 14 days to send you a COBRA election notice, which will give you all the information about your health insurance plan and its costs .
After receiving the election notice from the insurance company, youll then have 60 days to return the election notice to the insurance company, signaling that you would like to begin COBRA coverage. You wont pay your first premium when you send your election notice back, but will need to do so within 45 days after the start of your COBRA coverage.
How Long Can I Stay On Cobra
In most cases, COBRA coverage lasts for exactly 18 months from the date of the qualifying event and this will be the case if you leave or lose your job, or see a reduction in your hours that results in a loss of your benefits. In instances of death or divorce, COBRA coverage can last for up to 36 months.
Determining Whether Your Health Plan Is Covered By Cobra
In general, any private-sector company that has 20 or more employees is required to offer COBRA continuation coverage. If you work for a state or local government, chances are COBRA applies to your health plan, too. However, it doesnt apply to group health plans offered by the federal government or by churches and certain church-related organizations.
If you work for a smaller company, you might still be able to get COBRA-like coverage. Many states have laws that require companies with fewer than 20 employees to offer former employees the option to continue their group health coverage. This state-mandated continuation coverage is sometimes called mini-COBRA. Your state insurance commissioners office will be able to tell you if this coverage is available where you live.
Wait For A Letter In The Mail
Your former employer is required to notify the insurer in charge of the health plan of a qualifying event in this case, termination or a reduction in hours within 30 days.
After that, the plan administrator has 14 days to send you a notice in the mail with information about your coverage, where you should send your paperwork, and most importantly, how much it will cost. According to COBRA rules, the total premium cannot exceed 102% of the cost of health coverage for a current employee. That means you could be responsible for up to the sum of your premium, plus your employer’s portion, plus a 2% admin fee.
If you don’t want to wait for a letter, contact the health plan administrator or the company’s benefits manager for more information.
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Is It Worth It To Get Cobra Insurance
COBRA is expensive, but it could be worth it if you cant find a better alternative. For instance, lets say the only individual health insurance options in your area are expensive, your providers arent part of the individual plans networks and dont offer as much coverage as your COBRA plan.
In that case, you may decide to go with a COBRA plan.
You may also want a COBRA plan if you expect new coverage will begin soon, such as with a new employer, and just want to bridge coverage between employers.
How Much Does Cobra Health Insurance Cost
While a great option for a lot of people facing the end of their current insurance coverage, there is a catch COBRA will cost you. Without your employer contributing to the cost of the monthly premiums associated with this health insurance plan, premiums can be steep. Before your employer was likely contributing a significant amount towards your monthly health insurance premiums. Now you will be responsible for paying those premiums in full, all out-of-pocket which could translate into a real change in your monthly insurance cost.
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Pros And Cons Of Cobra
COBRA allows you to maintain the same plan as you would if you were still an employee.
Spouses, former spouses, or children are eligible.
COBRA can help bridge the health insurance gap until you qualify for another health plan.
You have up to 60 days to accept if you don’t sign up for COBRA right away. Coverage is retroactive.
You can keep using the same claims filing methods, doctors, and pharmacists that you’re used to.
COBRA can save you money on out-of-pocket costs.
Employer-sponsored health plans may provide broader networks than non-group health plans if you travel out of state or have more than one home.
You will pay a high premium for COBRA plans.
You only have 60 days to take or decline COBRA coverage.
You can only stay on a COBRA plan for a limited time, often from 18 to 36 months.
You’ll have to pay the premiums back to the date of your qualifying event if you wait to accept COBRA. Coverage is retroactive.
Your coverage changes under COBRA if your employer changes the plans coverage.
Not all employer group plans offer COBRA.
Your plan may not be available to you if you move out of state and the health network is limited.
How To Sign Up For Cobra
Your employer or health insurance administrator must let you know you that you have a right to enroll in COBRA. You then have at least 60 days to decide if you want to sign up.
You must tell the plan sponsor if you think you qualify because of divorce, legal separation, or the loss of dependent/child status. You can elect to take COBRA even if the primary employee elects not to do so.
You must pay your first COBRA premium within 45 days of accepting your plan. Contact the administrator or your companys human resources department for help if you’re not clear about the process, or if you didn’t receive a letter of eligibility.
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