COBRA Rules

Having a good understanding of COBRA rules may help you when it comes time to get the benefits you are entitled to under this legislation.

Understand your rights under COBRA

About COBRA

COBRA is the Consolidated Omnibus Budget Reconciliation Act. It allows people who have been fired, laid off, or who get divorced to continue to participate in an employer-provided group health insurance plan for a certain amount of time, otherwise the former employees or the newly-divorced person may be caught without this necessary coverage.

COBRA Rules for Health Plans

There are three basic COBRA rules that govern who can continue their coverage under the legislation's provisions:

1. The group health plan must be eligible for COBRA
2. A qualifying event must have taken place
3. The person seeking coverage under COBRA must be a qualified beneficiary

Eligible Health Plans

COBRA coverage is usually available to people who were covered under a group health plan offered by a private sector employer with 20 employees or more. Full-time and part-time workers are included in the numbers when determining the number of employees for COBRA purposes. Part-time staff members are considered a fraction of a full-time employee, and the hours they worked is used to determine what that figure is.

State and local government employees can also apply to continue their benefits under COBRA rules. Health insurance plans sponsored by the federal government are usually not eligible and church-sponsored plans are usually exempt.

Qualifying Event

A "qualifying event" is the circumstances under which the employee loses his or her health insurance coverage. In the case of an employee covered under COBRA rules, qualifying events are as follows:

• Loss of employment (unless the reason is gross misconduct)
• Reduction in the number of hours worked

In the case of an employee's spouse or dependent child, qualifying events are the same, with the addition of the following circumstances:

• The covered employee qualifies for Medicare
• The covered employee dies
• Divorce or legal separation from the covered employee

Qualified Beneficiary

Under COBRA eligibility rules, a person is considered a "qualified beneficiary" if he or she was covered under the group health plan the day before the qualifying event took place. Qualified beneficiaries under the group benefits policy include the following:

• The employee
• The employee's spouse or former spouse
• The employee's dependent children
• Children born to the employee during the time when health insurance coverage is continuing under COBRA
• Children adopted by the employee during the COBRA continuation period

Employer's Responsibility Under COBRA

Under COBRA rules, employers must include the employees' rights to continuation in the summary plan description (SPD). The SPD lists information about the plan and the benefits members are entitled to. The employer must provide plan members with a copy of the SPD within 90 days of signing up for coverage.

In addition, each employee and his or her spouse is given a general notice that describes their rights to continuing coverage under COBRA within the initial 90-day coverage period. If the SPD contains this information, receiving that document will fulfill this requirement under the COBRA rules. The general notice should include the following information:

• Name of the plan
• Contact person if you need more information about your rights under COBRA
• Description of the continuation of coverage you are entitled to with COBRA
• Required notice you need to give to the health plan's administrator to remain eligible for continuation of benefits under COBRA

If you need more information about your rights and obligations under COBRA rules, please visit the Department of Labor Employee Benefits Security Administration web site.

• Full Coverage Dental Insurance
• Low Cost Motorcycle Insurance
• Pros and Cons of Universal Health Care
• Car Accident Reports

• Free Medical Release Forms
• Sample Medical Release Form
• Guardian Dental Insurance
• Insurance Sample Cancellation Letter
• Sears Appliance Extended Warranty

• Category:Health Insurance
• COBRA Law
• Stimulus COBRA
• Main Page
• COBRA Stimulus