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COBRA - Continuing Your Health Coverage

Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA) in 1986. This law calls for most group health plans to provide a temporary continuation of group health coverage that otherwise might end.

COBRA generally applies to all private-sector, employer-sponsored health plans with at least 20 employees. COBRA also applies to plans sponsored by state and local governments. The law does not apply to plans sponsored by the federal government or by churches and certain church-related groups.

Employers may require covered persons to pay for COBRA coverage. The premium (amount paid for insurance coverage) generally cannot be more than the full cost of the coverage, plus a two-percent fee to manage the plan.

If you’ve recently had an event that could lead to the loss of your group health coverage, you may be eligible for COBRA.

Am I Eligible for COBRA?
A qualified beneficiary is a person who was covered by a group health plan on the day before a qualifying event took place. This person may have been an employee, the employee's spouse or former spouse, or the employee's dependent child.

Was There a Qualifying Event?
Qualifying events are events that cause a person to lose group health coverage. The type of qualifying event determines who the qualified beneficiaries are for that event and the period of time that a plan must offer coverage. COBRA outlines only the minimum requirements for continuation coverage. In some cases, state law or the plan itself may extend the period of continuation coverage.

The following are qualifying events for a covered employee if they cause the covered employee to lose coverage:

• End of the covered employee’s employment for any reason other than “gross misconduct”
• Cutback in the covered employee’s hours

The following are qualifying events for a spouse and dependent child of a covered employee if they cause the spouse or dependent child to lose coverage:

• End of the covered employee’s employment for any reason other than “gross misconduct”
• Cutback in the covered employee’s hours
• Covered employee becomes entitled to Medicare
• Divorce or legal separation of the spouse from the covered employee
• Death of the covered employee

In addition to the above, the following is a qualifying event for a dependent child of a covered employee if it causes the child to lose coverage:

• Loss of “dependent child” status under the plan rules

If you meet any of the standards above, please get in touch with your employer’s human resources office.

Visit the Department of Labor Web site to learn more about COBRA.