Eleanor Finch
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that allows employees and their dependents to temporarily continue their employer-sponsored health insurance after a qualifying event that would otherwise result in a loss of coverage. These qualifying events include the death of the covered employee, divorce or legal separation, a reduction in work hours, and termination of employment (except in cases of gross misconduct). The end of COBRA coverage is also considered a qualifying event, allowing individuals to alter their plan or enroll in a new one during the Special Enrollment Period.
| Characteristics | Values |
|---|---|
| What is a qualifying event? | Certain events that would cause an individual to lose health coverage under a group health plan |
| Who is a qualified beneficiary? | An individual who is entitled to COBRA continuation coverage because they were covered by a group health plan on the day before a qualifying event |
| Who can be qualified beneficiaries? | Covered employee, covered employee's spouse and dependent children, any child born to or placed for adoption with a covered employee during the period of COBRA coverage, agents, self-employed individuals, independent contractors and their employees, directors of the employer, and for public sector group health plans, political appointees and elected officials |
| How long does COBRA coverage last? | Typically, individuals can remain on COBRA for about 18 to 36 months |
| What are some examples of qualifying events? | Death of the covered employee, covered employee's termination of employment or reduction of the hours of employment, divorce or legal separation from the covered employee, a dependent child ceasing to be a dependent under the generally applicable requirements of the plan, covered employee becoming entitled to Medicare, covered employee's separation from the job |
| What is a qualifying life event (QLE)? | Any significant change in your circumstances that makes you eligible to alter your plan or enroll in a new one |
| What is Special Enrollment Period (SEP)? | A period that allows individuals to sign up for an Individual and family health plan outside the annual Open Enrollment Period (OEP) |
| What is the annual Open Enrollment Period (OEP)? | November 1 to January 15 |
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Job loss
The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides a way for workers and their families to maintain their employer-provided health insurance during situations such as job loss. Job loss is considered a qualifying event, allowing individuals to continue their health insurance coverage for a limited time after separation from their employer.
When an individual experiences job loss, they may be eligible for COBRA coverage if certain requirements are met. Firstly, the individual must have been enrolled in a group health plan by their former employer. Typically, this applies to employers with 20 or more employees, although some states may have different requirements. Secondly, the individual must be a qualified beneficiary, which includes covered employees, their spouses, and dependent children. Finally, the qualifying event, in this case, job loss, must result in the loss of health insurance coverage.
Upon experiencing job loss, individuals have up to 60 days to decide whether to elect COBRA continuation coverage. This coverage ensures that individuals can maintain the same health insurance plan they had while employed. However, it is important to note that COBRA coverage is temporary. In most cases, individuals can stay on COBRA for 18 to 36 months, providing them with flexibility in finding alternative health insurance options.
It is worth mentioning that the cost of COBRA coverage can be a significant consideration. Individuals may be required to pay the entire group rate premium out of pocket, along with a 2% administrative fee. Additionally, employers may choose to pay a portion or the full amount of the insurance premium for their former employees.
In summary, the end of COBRA coverage due to job loss is indeed a qualifying event that triggers an individual's right to continue their health insurance coverage. By understanding and utilizing COBRA benefits, individuals can ensure they have access to necessary healthcare services during transitional periods between jobs.
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Family circumstances
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees and their families who would lose their health insurance or other group health plan coverage due to a serious life event to keep it for a limited time, usually at their own expense. This temporary extension of health coverage is called COBRA continuation coverage.
A qualifying life event (QLE) is any significant change in your circumstances that makes you eligible to alter your plan or enroll in a new one. When you have a QLE, you qualify for a Special Enrollment Period (SEP). This SEP allows you to sign up for an Individual and Family health plan outside the annual Open Enrollment Period (OEP), which runs from November 1 to January 15.
Qualifying events include the death of the covered employee, divorce or legal separation of the covered employee from their spouse, the covered employee becoming entitled to Medicare, or a dependent child ceasing to be a dependent under the generally applicable requirements of the plan. In the case of the death of the covered employee, divorce or legal separation of the covered employee, or a dependent child losing their status, the employer or plan administrator must be notified within 60 days of the qualifying event.
In certain circumstances, qualified beneficiaries entitled to 18 months of continuation coverage may become entitled to a disability extension of an additional 11 months (for a total maximum of 29 months) or an extension of an additional 18 months due to the occurrence of a second qualifying event (for a total maximum of 36 months).
If you decide to terminate your COBRA coverage early, you generally won't be able to enroll in a Marketplace plan outside of the open enrollment period.
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Relationship status change
The end of COBRA coverage can constitute a qualifying event in the case of a relationship status change. A qualifying event is defined as an occurrence that would result in an individual losing health coverage under a group health plan. In the context of relationship status changes, there are several scenarios that could lead to a qualifying event:
- Divorce or legal separation: If a covered employee undergoes a divorce or legal separation from their spouse, this is considered a qualifying event. The former spouse can extend their insurance benefits for up to 36 months from the date of the qualifying event. It is the responsibility of the employee or a family member to inform the plan administrator of the divorce or legal separation within 60 days.
- Loss of dependent child status: When a child of a covered employee loses their dependent status under the plan, this can be considered a qualifying event. The plan administrator should be notified within 60 days of the event.
- Death of the covered employee: In the unfortunate event of the death of the covered employee, the COBRA law allows the spouse and qualified dependents to continue the same group workplace insurance coverage for up to 36 months.
It is important to note that the length of COBRA coverage after a qualifying event depends on the nature of the event. While divorce, legal separation, and loss of dependent child status provide up to 36 months of coverage, other qualifying events related to employment status changes typically offer up to 18 months of coverage.
Additionally, individuals should be mindful of the election period for COBRA continuation coverage. Qualified beneficiaries generally have at least 60 days after the date of the qualifying event to decide whether to elect COBRA coverage. If the election is made during this period, coverage will be provided from the date that coverage would have otherwise been lost.
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Reduction in hours
A reduction in hours is a qualifying event under the Federal COBRA Act, which gives workers and their dependents the right to continue their employer-sponsored health insurance if that coverage would end due to a qualifying event. This includes job loss or family circumstances.
A reduction in hours of employment occurs when there is a decrease in the hours that an employee is required to work or works, but only if the decrease is not accompanied by immediate termination. For example, an absence from work due to disability, a temporary layoff, or any other reason (except for FMLA leave) is considered a reduction in hours if employment does not immediately end. Similarly, a strike or lockout that results in a loss of coverage is also considered a reduction in hours.
To be considered a reduction in hours, an employee must not average at least 30 hours of service over the full standard measurement period. This typically means not reaching 1,560 hours of service in a 12-month period. In this case, the qualifying event occurs at the end of the plan year in which the employee loses coverage.
If an employee's hours are reduced, they are entitled to up to 18 months of COBRA coverage, which starts on the date of the qualifying event. This allows them to maintain their previous health insurance coverage, protecting them from experiencing a gap in coverage due to a legitimate reason outside the standard open enrollment period.
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Retirement
If a retiree and/or qualified beneficiaries elect alternative retiree coverage, the employer is not obligated to offer COBRA after the alternative coverage ends. However, there are special exceptions if the alternative coverage ends early due to a second qualifying event, such as the retiree's death, divorce, Medicare entitlement, or a dependent losing eligibility. In these cases, the spouse or dependent must be offered 36 months of COBRA coverage under the alternative plan.
Additionally, if a retiree's spouse or dependent loses coverage during the alternative retiree coverage period due to a second qualifying event, the employer must offer COBRA to that qualified beneficiary.
It is important to note that COBRA coverage may end early if an individual does not pay premiums on time, the employer ceases to maintain any group health plan, or the individual obtains coverage with another employer's group health plan.
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Frequently asked questions
A qualifying event is a certain event that would cause an individual to lose health coverage under a group health plan.
Yes, the end of COBRA coverage is considered a qualifying life event, allowing individuals to qualify for a Special Enrollment Period (SEP).
Qualifying events include the death of the covered employee, divorce or legal separation, a covered employee becoming entitled to Medicare, and a dependent child ceasing to be a dependent.
After a qualifying event, individuals are eligible to continue their insurance coverage for a limited time, typically 18 to 36 months, depending on the nature of the event.
