COBRA
What is COBRA?
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who have had a change in employment status and therefore have lost their health benefits the right to continue their group health benefits for a limited period of time. Those who qualify for COBRA may be required to pay the entire premium for coverage up to 102% of the cost of the plan.
COBRA law requires employers to offer continuation of group health plans to individuals who lose coverage because of certain qualifying events including:
- Termination of employment
- Reduction in work hours
- Divorce or legal separation
- Death of the covered employee
- Employee Medicare Entitlement
- Employer bankruptcy
- A dependent child ceasing to be a dependent under the plan
Resources
GEON offers COBRA through WageWorks. GEON offers an 18-month COBRA continuation coverage period. An 18-month COBRA continuation coverage period may be extended to 29 or 36 months, respectively, if a qualified beneficiary is disabled (for Social Security purposes) prior to or at any time within the first 60 days of COBRA continuation coverage or has a 36-month qualifying event during the original 18- month continuation coverage period or 29-month disability extension period. A qualified beneficiary has 45 days after the date on which he or she elected COBRA to make an initial payment.
Electing COBRA:
When a qualifying event occurs, a qualified beneficiary generally has a 60-day election period during which continuation coverage can be chosen. This election period begins no later than the date coverage is lost due to the qualifying event and continues until at least 60 days after coverage is lost or – if later – the date the COBRA election notification is provided to the qualified beneficiary.
COBRA Alternatives
Alternatives to COBRA include the following:
- Health Insurance Marketplaces – Health insurance marketplaces (known as “Exchanges”) give individuals the option to purchase coverage from insurance carriers participating in the marketplace. Depending on their income, they may qualify for federal tax credits to help pay for coverage purchased through the marketplace.
- Individual and Family Plans – Individuals can purchase plans that cover themselves, their spouse or life partner, just their children, or their entire family.
- Coverage through a New Employer – Individuals may find coverage with a new employer’s plan. Depending on the plan rules, there might be a gap in coverage. If they don’t want to go without coverage, they may elect COBRA continuation coverage for this brief span or purchase a short-term medical plan through SimplyCovered.com.
- Coverage through a Spouse’s Plan – If a spouse is employed, the individual may be eligible for coverage under their spouse’s employer plan. HIPAA mandates that group health plans provide special enrollment rights to individuals in certain circumstances. These special enrollment rights allow enrollment in the plan without having to wait until the plan’s next regular enrollment period.
- Coverage as a Dependent – Qualified beneficiaries may be able to get coverage under their parent’s plan until they turn age 26. As part of health reform, group health plans that offer coverage to dependents extend coverage to “young adults” until their 26th birthday.
- Medicare – Medicare is health insurance for people age 65 or older or people under age 65 with certain disabilities. Medicare is also available to anyone with end-stage renal disease, regardless of age.
