Art Gallagher Consulting Guide
COBRA Continuation Coverage?
Who Is Entitled
COBRA Rights and Responsibilities:
Notice and Election Procedures
Summary of Qualifying Events,
Paying for it
No Pre X Clause!
Questions that may come up when one loses their job-based coverage
Federal COBRA and California Cal-COBRA
Federal COBRA and California Cal-COBRA basically provide that if you are no longer covered under your Employer’s group health plan, you can keep the coverage regardless of your health and with no pre-existing condition clause for 18 (Federal) or 36 months (California) at 2 to 10% more premium than your employer was being billed from the Insurance Company.
Since everything now is Guaranteed Issue with No Pre-X under Health Care Reform, consider going on an Individual Plan.
Even if it’s NOT Open Enrollment, there is Special Enrollment, as you have just lost coverage MEC. Under Special Enrollment, your coverage is the first of the month after you apply, rather than the crazy 15th and miss a month deadline. Emails dated 1.21.2015 2:07 PM
If you have problems obtaining your COBRA, or CAL COBRA coverage, we can lead you in the right direction. It’s basically though something that you arrange directly through your Former Employer’s HR Department or Insurance Company. We suggest that you get Quotes for the Healthy Members of your Family and see if you can get a better alternative than COBRA. With your own Individual coverage you have the option of taking a higher deductible, HSA or not taking maternity dental, life or vision to save $$$.
Lapse? Re-Instatement? Grace Period? COBRA
There is a minimum 30-day grace period for each successive payment due date. Payment is considered made on the date it is postmarked (if it is mailed), not the date of the check or the date the payment is physically received by the Plan. (cms.gov Page 15 Section V # 4, dol.gov, vantaggiohr.com Treasury Regulation §54.4980b-8 Question # 5)
Under the new regulations, qualified beneficiaries must receive what is called an “Early Termination Notice” if they lose coverage due to failure to make payment by the due date or within the grace period. (dol.gov/)
When there occurs a “qualifying event” that entitles persons covered by an employer group health plan to elect continuation coverage, such as the employee’s termination of employment or death, the divorce of the employee and his or her spouse, or a dependent child’s ceasing to qualify for dependent coverage under the plan, a notice of the right to elect continuation coverage generally must be sent to each person (termed in the COBRA law a “qualified beneficiary”) who has that right. If the “qualifying event” is the employee’s termination, reduction of hours or death, the employer has 30 days after the event (or, if later, 30 days after the date coverage is lost) to notify the plan administrator, which in turn must give the notice of COBRA rights within 14 days to persons entitled to elect coverage. (If the employer and the plan administrator are the same, it has the full 44 days to give the notice.)
How soon the notice is provided affects how long eligible persons have to elect continuation coverage because they must be given at least 60 days from the date of the notice. Wilcox & Savage Esq. * Reporting & Disclosure Guide (DOL)
COBRA Detailed Definition
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances “Qualifying Event” such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan. (110% for Cal Cobra)
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year (2 with Cal Cobra) offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice. (Department of Labor )
When your employer changes Insurance Companies, the COBRA coverage goes with the NEW company. (DOL Guide Page 11 “Similarly Situated Active Employees, Code of Federal Regulations § 54.4980B-5Q 1 & 4)
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) – COBRA
is a federal law that provides rights to temporary continuation of group health plan coverage for certain employees, retirees and family members at group rates when coverage is lost due to certain Qualifying events (§ 1163). Generally, COBRA applies to employers who employed 20 or more employees in the prior calendar year. If the group health plan is a multi-employer, collectively bargained plan, only one contributing employer needs to have 20 or more employees in the prior year in order for COBRA to apply to the whole plan.
Fact Sheet DOL
Required Notice for COBRA rates to go up?
The applicable premium must be fixed for a 12-month “determination period.” ERISA § 604 (3); Treas. Reg. § 54.4980B-8, Q/A-2(a) §1164 (3). Therefore, a mid-period increase in insurance rates will not permit a mid-period increase in the COBRA premium charged to QBs. Heart of Matters.com benefitslink.com/
The law limits the conditions when the applicable premium may be increased during a determination period.
A determination period is any 12-month period selected by the plan that is applied consistently from year to year. During a determination period, a plan can increase the premium only in the following three cases:
- (1) The plan has previously charged less than the maximum amount permitted and the increased amount required to be paid does not exceed the maximum amount permitted; or
- (2) The increase occurs during a disability extension and the increased amount required to be paid does not exceed the maximum amount permitted; or
- (3) A qualified beneficiary changes the coverage being received. Because the law is clear in its guidance for premium increases, it is advisable to consult your benefits professional or legal counsel when passing on rate increases to COBRA participants for reasons not stated above. (cobrapoint.com)
Legal Separation? Unofficial Separation?
Q-1: What is a qualifying event?
A-1: (a) A qualifying event is an event that satisfies paragraphs (b)…
(b) An event satisfies this paragraph (b) if the event is any of the following—
(3) The divorce or legal separation of a covered employee from the employee’s spouse;
(c) An event satisfies this paragraph (c) if, under the terms of the group health plan, the event causes the covered employee, or the spouse or a dependent child of the covered employee, to lose coverage under the plan. For this purpose, to lose coverage means to cease to be covered under the same terms and conditions as in effect immediately before the qualifying event. … If coverage is reduced or eliminated in anticipation of an event (for example,… an employee’s eliminating the coverage of the employee’s spouse in anticipation of a divorce or legal separation), the reduction or elimination is disregarded in determining whether the event causes a loss of coverage. 26 CFR 54.4980B-4 Qualifying Events
Gross Misconduct? Might prevent you from getting COBRA
Call us to discuss 310.519.1335. We will open up Tax Facts with details we can’t post due to copyright.
Open Enrollment NAIC
Employee, Dependent & CONSUMER Resources & Links
Employer, Technical & Research Links
Employer Reporting & Disclosure Guide (DOL) aka Health And Retirement Benefits After Job Loss
3rd Party Administrators & Reference Services
Ceridian COBRA Compliance Services
COBRA Federal Regulations
If links do not go directly to what you are looking for… try “search” on the Government Site or “Google.”
§54.4980B-0 Table of contents.
§54.4980B-1 COBRA in general.
§54.4980B-2 Plans that must comply.
§54.4980B-3 Qualified beneficiaries.
§54.4980B-4 Qualifying events.
§54.4980B-5 COBRA continuation coverage.
§54.4980B-6 Electing COBRA continuation coverage.
§54.4980B-7 Duration of COBRA continuation coverage.
§54.4980B-8 Paying for COBRA continuation coverage.
§54.4980B-9 Business reorganizations and employer withdrawals from multiemployer plans.
§54.4980B-10 Interaction of FMLA and COBRA.
§54.4980D-1 Requirement of return and time for filing of the excise tax under section 4980D.
§54.4980E-1 Requirement of return and time for filing of the excise tax under section 4980E.
§54.4980F-1 Notice requirements for certain pension plan amendments significantly reducing the rate of future benefit accrual.
Tax Facts Requires Subscription Email us to discuss
COBRA Continuation Coverage Requirements
Our Pre Underwriting form will save you time and effort to see if you qualify for a Individual & Family Plan.When your COBRA or CAL COBRA coverage ends, expires, terminates… you pre health care reform could have HIPAA guaranteed issue, until you reach Medicare eligibility. Now it’s Obamacare
Are short term plans available?
When you have COBRA or Cal COBRA, you have the same rights as other employees. You may change plans at Plan Anniversary - Open Enrollment, otherwise everything is the same as when you were an employee, other than you are paying all the premium and a 2% surcharge for the extraexpense of an individual vs group employER invoice.
Since COBRA has been made pretty much obsolete under Health Care Reform... not all the links work... Try scrolling the entire page or just Email us.
2. Where can I get more details on MY specific plan and options?
KQED story about a reporter taking five weeks to get coverage with Covered CA. Part of the problem was answering the question about if you have COBRA coverage. We can help you with this, no extra charge. First, get a instant quote and we will contact you.
3. What happens if your Employer changes coverage from one Insurance Company to another?
4. What if my COBRA gets cancelled?
5. What if I'm separated and my spouse cancels my coverage, is that a Qualifying event?
6. Where can I get more information on Cal COBRA?
Blue Cross Small Group Plan SAMPLE EOC
Kaiser COBRA Specialist # 866-429-0142
7. How much notice must one receive, before COBRA rates can go up?
8. Do you have an FAQ section for Cal COBRA? What is Gross Misconduct?
9. What notices must the Employer give the Employee?
Know your COBRA rights - Video
Video on how much coverage for death protection you need
Child, Related Pages & Site Map