What is COBRA insurance? Let’s say you have enjoyed employer-provided health care benefits for some time, but suddenly find yourself without a job, and therefore without health insurance. What do you do now? An experienced employment attorney can help you to understand the filing requirements and options associated with continuing coverage utilizing state or federal resources.

California Continuation of Benefits Replacement Act

Federal provisions for health insurance coverage provide options for employees who previously worked for a company with 20 or more employees and lost coverage due to a qualifying event.  Federal law left a gap in coverage for employees of smaller companies. Thus, in 1997, California legislators expanded federal Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage for California workers. The legislation requires health maintenance organizations (HMOs) and insurance carriers to provide COBRA-type benefits to employees of smaller companies that employ two to 19 workers. Employees who were enrolled in a healthcare plan within one day prior to a qualifying event are entitled to these benefits.

COBRA Insurance Qualifying Events

Several occurrences may result in a loss of health care coverage with corresponding COBRA insurance coverage options. Those include:

• Retirement;
• Entitlement to Medicare;
• Divorce/remarriage;
• Termination for a reason other than “gross misconduct;”
• Reduction in a covered employees’ hours at the employer’s behest;
• Death of a covered employee.

Additionally, a dependent child whose covered parent dies is entitled to coverage until age 26 as outlined by the Affordable Care Act.

Defining  COBRA Insurance Coverage

Insurance benefits, deductibles and limits must be identical to “similarly situated active plan participants” according to COBRA requirements. If or when plans change for active participants, COBRA insurance recipients’ plans will experience like changes.

Qualified beneficiaries are entitled to the same notices as active employees and are allowed to make modifications during the same open enrollment windows that active employees have.  Additionally, beneficiaries may expect to know then coverage begins and end, and when they are ineligible for coverage. Pre-existing conditions will not impact your ability to receive coverage.  Additionally, you are eligible to receive access to the same dental and vision coverage plans as working employees under COBRA (though not necessarily under Cal-COBRA).

Employees have the responsibility to notify employers when a qualifying event occurs according to employer notice procedures.

If You Choose COBRA Insurance

If, after a qualifying event, you elect to obtain COBRA insurance coverage, your have 60 days from the time you receive notice to enroll. If you do not get a notice about your coverage opportunities, it is important to speak with your former employer or health plan administrator quickly, as these deadlines are pretty hard and fast.

After enrolling, your first premium must be paid within 45 days. You are able to keep your COBRA plan for at least 18 months, and can switch over to Cal-COBRA for another 18 months after that. For employees from smaller companies, Cal-COBRA plans allow you to stay enrolled for up to 36 months. Premium payments will be your responsibility. [Read more…]