Frequently Asked Questions
What is COBRA?
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) imposes a duty on employers to provide continuation of certain employer-sponsored health plan coverage to covered individuals, spouses, and dependents who experience a qualifying event that results in a loss of coverage. The employer must permit "qualified beneficiaries" to elect to continue their health insurance under the plan for 18, 29, or 36 months, depending on the "qualifying event" that entitles the person to coverage. See COBRA Schedule of Benefits for Qualifying Event types and timeframes.
Why is COBRA so expensive?
As an active employee, the Company paid a large portion of your health insurance premium. Under COBRA, the Company no longer pays a portion of the insurance premium; you are responsible for 100% of the premium plus a 2% administration fee. However, in the event of an 11-month disability extension, an employer may charge up to 150% of the premium.
What benefits can I continue under COBRA?
You can only continue the Health benefits you had as an active participant. This includes Medical, Dental, Vision and the Health Care Spending Account. Employee Assistance Plans can sometimes be offered under COBRA, depending on the plan design. STD, LTD, Life and AD&D Insurance and the Dependent Care Spending Account may not be continued under COBRA.
When does COBRA coverage begin?
Eligibility for COBRA coverage begins the day after the coverage under your active benefit plans end.
Who is a qualified beneficiary under COBRA?
An employee, spouse and dependent child covered on the day before the qualifying event.
What events qualify employees for COBRA?
Loss of health benefits due to voluntary or involuntary termination of employment for any reason other than gross misconduct, transfer to benefit ineligible position, or reduction in hours worked. (See COBRA Schedule of Benefits)
What events qualify the spouse of an employee for COBRA?
Loss of health benefits due to; voluntary or involuntary termination (not gross misconduct) of the employee’s employment, reduction in the hours worked by the covered employee, the covered employee’s transfer to benefit ineligible position, Medicare entitlement by the covered employee, divorce or legal separation from the covered employee, or death of the covered employee. (See COBRA Schedule of Benefits)
What events qualify dependent children for COBRA?
Loss of health benefits due to; Loss of dependent child status under the plan rules, voluntary or involuntary termination (not gross misconduct) by the covered employee, the covered employee’s transfer to benefit ineligible position, reduction in the hours worked by the covered employee, Medicare entitlement by the covered employee, divorce or legal separation from the covered employee, death of the covered employee. (See COBRA Schedule of Benefits)
What are the time frames for COBRA notifications and payments by participants?
COBRA time frames are as follows:
- Employers must notify plan administrators within 30 days after the qualifying event.
- Plan participants and qualified beneficiaries must then be notified of their COBRA rights within 14 days.
- The individual has 60 days to decide whether to elect COBRA coverage.
- The individual has 45 days after the date the election form is received to make the initial payment.
- Ongoing, premiums are due on the first of the month, however there is a 30 day grace period. PLEASE NOTE: Coverage will be retroactive to the date after loss of coverage.
How can I check to make sure my payment was received?
A COBRA Benefit Center Representative can verify if your payment was received and if there is a balance due. Please contact the COBRA Benefit Center toll free, at (877) 837-5017 for assistance. Customer Service Representatives are available Monday through Friday, 7:30 am – 6:00 pm CST.
Where do I send my payment?
Please mail your premium payment to:
1700 E. Golf Road, Suite 1000
Schaumburg, IL 60173
It is highly recommended to include your Benefit Express Payment Coupon to ensure quick and accurate processing. If you do not have payment coupons, please contact the COBRA Benefit Center at (877) 837-5017.
When is COBRA coverage terminated?
COBRA coverage ends at the end of the maximum coverage period (18, 29 or 36 months depending on the situation) or when the following events occur:
- Premiums are not paid on time
- The employer ceases to offer all group health plans
- After the COBRA election, other group health insurance is obtained
- After the COBRA election, a beneficiary becomes entitled to Medicare benefits
Can a person qualify for a longer period of COBRA coverage?
Disability can extend COBRA coverage for an additional 11 months. To qualify:
- The Qualified beneficiary must have been determined to be disabled by the Social Security Administration within the first 60 days of COBRA coverage.
- The COBRA administrator must be notified within the 18 month COBRA period
- The disability must continue through the entire 18 month COBRA period.
Plans can charge up to 150% of the premium cost for this extended coverage period.
When is the employer responsible for notifying the plan administrator of a qualifying event?
The Company will notify the plan administrator if you or your dependent becomes eligible for continuation coverage for the following reasons:
- you are no longer a full-time active employee;
- you become entitled to Medicare;
- your employment ends for any reason except gross misconduct;
- you retire; or you die while employed.
In what cases do I or my dependent have to notify the plan administrator of a qualifying event?
The employee or other qualified beneficiary must notify the plan administrator of one of the following qualifying events:
- Legal separation
- a child no longer a qualifies as a dependent under the plan provisions
- a determination by the Social Security Administration that you were disabled during the first 60 days of COBRA coverage
- A beneficiary becomes entitled to Medicare
- Death while covered under COBRA.
Can a qualified beneficiary change his or her COBRA elections?
Yes, during annual enrollment, a qualified beneficiary must be given the same coverage choices as active employees.
When will coverage be updated with the carrier?
Once the qualified beneficiary returns a completed enrollment form and an initial payment that brings payments current, coverage will be updated with the carrier. Carrier notification happens within 24 hours of receipt of the COBRA enrollment form, however depending on file processing and carrier procedures, it may be up to 10 business days before the carrier shows the individual to be covered.
How does a severance period provided by my company affect COBRA?
It is your employer's decision as to how COBRA is affected by any severance period. Your employer should provide clear directions about whether coverage under the active employees’ health plan continues during the severance period or whether COBRA takes effect during the severance period.
Can I add or drop dependents?
Only in the event of a qualified family status change or during Annual Enrollment. You must call the COBRA Benefits Center at (877) 837-5017 within 30 days of a qualified family status change to add or drop dependents. Examples of qualified family status changes are the birth or adoption of a child, the loss of dependent status, and marriage. Keep in mind - the amount of your premium may change.
What if one of my dependents loses dependent status during my COBRA period?
That individual may continue coverage for a total of 36 months. This includes the time he or she was already on COBRA.
What is a HIPAA notice?
HIPAA stands for Health Insurance Portability and Accountability Act of 1996. HIPAA states that if you change jobs and have a HIPAA notice, you will be able to get health insurance at your new job if it is available, without being affected by any pre-existing condition provision. This notice will be sent to you by your Benefits Administrator or medical insurer upon notification of your termination of employment. If you elect COBRA continuation coverage, a notice will also be sent to you upon your termination of COBRA continuation coverage. Be sure to keep this notice and provide a copy to your new employer upon enrolling for insurance.
How does Medicare entitlement affect COBRA coverage?
If Medicare eligibility occurs after COBRA coverage is elected, COBRA coverage can be cancelled. If a qualified beneficiary is entitled to Medicare prior to the COBRA qualifying event, COBRA coverage must still be offered.