C.O.B.R.A. stands for the Consolidated Omnibus Budget Reconciliation Act of 1985, which is the federal legislation that included sweeping changes affecting employee health care coverage after separation from their employer. The law requires that health insurance be offered to “covered” employees and certain of their beneficiaries who have experienced a “qualifying” event (e.g. termination).
The first thing you need to do in understanding your rights under COBRA is to determine if you are a “covered” beneficiary. You do not need to be an employee to receive COBRA benefits, if you are/were covered by the employer’s health care plan and are either a spouse or dependent child (adopted or biological children can both be covered).
The critical inquiry is whether the employee was covered by the employer’s health plan and if that plan was a plan regulated by the law. The first prong is straightforward. Determining if the employer’s plan qualifies you, however, requires looking at the law itself. The law covers most employer plans, but there are two large exceptions: 1) when your employer is a church, and 2) when your employer employs fewer than twenty individuals. In these two cases, there is a likelihood that the law does not cover your health plan, and that you, therefore, are not covered by COBRA.
A qualifying event is an event resulting in the termination of the employee from his/her employment. This termination can be voluntary or involuntary. In other words, an employee can resign or be fired and both situations will be qualifying events. Since an employee’s spouse and dependent children are also covered, the death of an employee is also a “qualifying” event. In addition, divorce can be a qualifying event for the spouse of a covered employee. The emancipation of a dependent child can also be a “qualifying event for the child.
WHAT ARE YOUR RIGHTS?
Once you have established that you are a covered employee (or beneficiary) and that your separation from the employer is a qualifying event, then you need to know what your COBRA rights are.
COBRA provides continuation of health care coverage from 18 up to 36 months after the “qualifying” event. Once this event occurs, the health care plan is required to send you a notice that you are entitled to coverage. The notice will contain a statement of your rights under COBRA. Typically, you have sixty days to invoke your rights under the law.
COBRA entitles you to continued health care coverage, but it is not free. The information provided by your health care “plan” will contain coverage premiums and payment deadlines.
It is also important to understand that you may have an obligation to inform your employer and/or the health care plan of certain qualifying events in order for you or your beneficiaries to secure coverage. For example, if there has been a divorce or a child has ceased to be a dependant, you will have up to sixty days to report to your employer and/or the “plan” or your COBRA rights may be lost.
COBRA is an important law that keeps you and your family covered in case of medical emergency while you secure new employment or new health coverage. Knowing your rights is critical to ensuring your and your family members realize this protection as soon as possible.
Note: This article is for illustration purposes only and should not be substituted for specific legal or medical advice. If you have any questions about your rights under COBRA, you should contact an attorney specializing in this area of law.