Employees who obtain group health insurance through their employer can lose their coverage when their employment situation changes. Similarly, their families can also lose coverage if the employment or family situation changes. COBRA continuation coverage provides employees and families who are no longer eligible for group health insurance due to a qualifying event with temporary health insurance coverage.
The Consolidated Omnibus Budget Reconciliation Act, which was passed in 1986, contained health benefit provisions that are commonly called COBRA continuation coverage. These benefits extend group health insurance that would be terminated due to a qualifying event, ensuring that employees and their families aren’t without health coverage when they experience a qualifying event that would otherwise cancel their group health insurance benefits obtained through their employer.
Several events that could affect an employee’s or family member’s health insurance are covered under COBRA. The list of qualifying events includes:
How long COBRA coverage lasts depends on what qualifying event triggered the coverage. If an employee is terminated or has their hours reduced, COBRA coverage can last for up to 18 months. For other events, it may last up to 36 months. In both cases, COBRA coverage typically begins on the day of the qualifying event, and it will be terminated early if a potential beneficiary doesn’t pay the coverage premiums.
Businesses that have at least 20 employees are typically required to provide COBRA coverage, and there are usually legal requirements to notify employees of COBRA coverage if it’s provided.
COBRA coverage premiums are usually paid for by the person receiving the coverage (i.e. an employee, an employee’s family, a former spouse, or a former dependent). There are federal requirements about how much the premiums can be and how they can be billed, but the responsibility for paying for coverage typically falls to the employee or their family.
Several organizations formally oversee different aspects of COBRA coverage:
Businesses can, of course, contact the federal agencies that oversee COBRA coverage to learn more about it. Reaching multiple agencies can take a significant amount of time, though.
It’s often easier for businesses to talk with the firm that helps them set up a group health insurance plan. Because COBRA coverage is essentially a continuation of group health insurance benefits under certain, qualifying circumstances, firms that help businesses set up group health plans are often well versed in and able to assist with COBRA continuation coverage.
The Feingold Companies
Worcester Office
446 Main Street, Suite 1403
Worcester, MA 01608
Phone: (508) 831-9500
Fax: (508) 797-4030
New Lakeside & Dudley Insurance
446 Main Street, Suite 1403, Worcester, MA 01608
Phone: (508) 943-0090
This material is for informational purposes only. All statements herein are subject to the provision, exclusions and conditions of the applicable policy. For an actual description of all coverages, terms and conditions, refer to the insurance policy. The Feingold Companies is a full-service organization in which offers insurance and employee benefit services through affiliated companies. All individuals listed are affiliated with The Feingold Companies and offer insurance and employee benefit services through Feingold Insurance Agency, Feingold Financial Management and Feingold Employee Benefit Services. Saul Feingold, David Dimenstein, Jed Brandes, Elisa Lindley, Velma Almeida & Carlos Ortiz offer securities through Cambridge Investment Research, Inc., a broker dealer member FINRA/SIPC . Advisory services through Cambridge Investment Research Advisors, Inc. a Registered Investment Adviser. The Feingold Companies are not affiliated with Cambridge Investment Research, Inc. Connor MacNeil is not affiliated with Cambridge Investment Research Advisors, Inc. to offer securities or advisory services. Please be advised that the above referenced New Lakeside and Dudley Insurance Agency only offers insurance related products and services. This office does not contain individuals who are licensed or registered to sale or promote securities related products. If you are interested in receiving securities related products and services please visit or contact our Worcester Office location only. This communication is strictly intended for individuals residing in the states of AZ, CA, CO, CT, DC, FL, GA, IA, IL, MA, ME, MI, MN, NC, NH, NJ, NM, NV, NY, OH, PA, RI, SC, TN, TX, VA. No offers may be made or accepted from any resident outside the specific state(s) referenced. Copyright 2021. All Rights Reserved