The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law designed to protect against lapses in health coverage in the event of unemployment or loss of eligibility.
When your employer-sponsored health coverage ends, you’re entitled to receive a COBRA notification within 45 days from your employer. Eligible individuals have 60 days past the loss of coverage date to elect COBRA coverage for up to 18 months. In some instances, the people impacted by loss of coverage are the dependents of the previously covered employee, and they can gain COBRA coverage for up to 36 months.
There are seven qualifying life events that make someone eligible for COBRA:
- Termination of employment
- Reduction in weekly hours worked
- Job transition that would temporarily lead to loss of health coverage
- Loss of dependent child status
- Death of the covered employee
- Medicare eligibility for the covered employee
- Divorce or legal separation from the covered employee
While the benefits of your previous coverage remain the same through elected COBRA coverage, the cost will change significantly. Oftentimes, employers pay a certain percentage of insurance premiums for their employees, but once you become COBRA-eligible, you are responsible for the total premium cost of any coverage you choose to continue.
For example, if your employer pays $500 in total for your health insurance premium each month, and they share 25 percent of that cost with you, then your monthly responsibility is $125. If your job situation changes and you elect COBRA, your new monthly premium would be the full $500, plus an administration fee.
Making sure you have continued access to health benefits is important. If you have further questions regarding COBRA coverage or eligibility, please reach out to your Schauer Group representative.
