COBRA - know your rights

[Admin]

Here is some great info from the NC Bar Association . . .

MAINTAINING HEALTH INSURANCE-COBRA AND HIPAA

Job termination or a reduction in hours does not mean that you and your family must go without health insurance. The federal government, in the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as "COBRA," has established laws to ensure that you can continue to receive health coverage.

Eligibility

If you are laid off, have your hours reduced or are terminated, you and your family may be eligible for continuing health benefits under COBRA if the following criteria apply:
Your employer regularly had 20 or more employees working at least 50 percent of the time in the previous year. (This includes part-time employees.)
Your employer maintained a group health insurance plan.You (and your family, if applicable) participated in that group health insurance plan.
You are terminated for a reason other than "gross misconduct." Your employer continues to operate a group health insurance plan after your termination.
You continue to pay premiums on a timely basis.
You have not reached the maximum coverage period for COBRA coverage.
You are not eligible for other group health insurance or governmental health benefits.

Election of Coverage

If you qualify for COBRA benefits, the health plan administrator at your former job must provide you with written notice explaining your rights under COBRA and the procedure for electing coverage upon your termination. All of your family members who were properly participating in your employer's health plan on the date of your termination are also eligible for COBRA coverage.

You and your family have 60 days from the date of the "qualifying event," that is, your termination date (or the date you first received notice, whichever is later) to elect coverage. You will have the choice of electing individual coverage for yourself or family coverage to include the family members who were covered on your date of termination. This 60 day time period cannot be extended. Once you elect coverage, that coverage is retroactive to the date you were terminated.

Benefits

COBRA benefits, by law, must be the identical health benefits to which you were entitled prior to your termination. A plan may, but is not required to, allow a terminated employee to opt out of "non-core" health benefits such as vision and dental plans. COBRA does not provide for continuation of life insurance, disability insurance or accident insurance.

In general, you are allowed to have COBRA health benefits through your former employer for up to 18 months. (In certain limited situations, you can maintain COBRA health insurance for up to 36 months.) Be aware that if you relocate out of your COBRA health plan's coverage area, you will lose your COBRA benefits since the employer is not required to offer you coverage in an area which the plan does not cover.

Cost

In most cases, you will be required to pay for the entire cost of your COBRA health benefits. Generally, COBRA insurance is more expensive than any fees you may have had to pay as an employee. However, COBRA insurance is usually cheaper than individual health insurance you could purchase on your own. Furthermore, by law your plan administrator can only charge you up to 102 percent of the plan's cost. The extra 2 percent is allowed for expenses associated with maintaining you and your dependents on the plan. The plan administrator cannot charge any other surcharge or premium which is not charged to ongoing employees.

After you elect COBRA, you have 45 days to pay the first premium, which is likely to be high because it covers the period retroactive to the date coverage ended through your employer. Successive payments are due according to plan requirements, but COBRA allows for a 30 day grace period after each due date for payment. However, neither the plan administrator nor the employer is required to send you monthly premium notices, so make sure you pay attention to due dates.

Pre-existing Exclusions in Health Coverage

Once you obtain new employment, you may be concerned about whether your new insurance will cover your pre-existing conditions. Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), your new health insurance plan is required to provide coverage for pre-existing conditions provided that you had no break in your insurance coverage. For purposes of HIPAA, a break in insurance is defined as a period of time in which you had no insurance in place for more than 63 days. Although HIPAA allows for a short period of non-coverage, you still may want to obtain COBRA in case your job search takes longer than you anticipate. If you forgo COBRA and wind up with a gap in coverage of more than 63 days, you will lose your HIPAA protection for pre-existing conditions.

More info available from:

N.C. Bar Association Young Lawyers Division
Attn: Life After Layoff Brochure
P.O. Box 3688Cary, NC 27519

Visit their website at www.ncbar.org