Consumer Frequently Asked Questions: COBRA Coverage
Does my employer have to offer me the opportunity to elect continuation of my health insurance coverage?
Answer: In general, most employers with 20 or more employees who provide group health plans must offer each "qualified beneficiary" who would otherwise lose coverage under the plan because of a "qualifying event" an opportunity to elect continuation of the coverage received immediately before the qualifying event.
Who is a qualified beneficiary?
Answer: Generally, a qualified beneficiary is any individual who, on the day before a qualifying event, is covered under a group health plan maintained by the employer of a covered employee by virtue of being: (1) the covered employee, (2) the spouse of the covered employee, or (3) the dependent child of the covered employee. Exceptions include Medicare eligible individuals and certain nonresident aliens.
What is a "qualifying event"?
Answer: A qualifying event is any one of the following events which would result in the loss of health insurance coverage: (1) the death of the covered employee, (2) the termination (other than for reasons of gross misconduct) of a covered employee's employment, (3) a reduction in a covered employee's hours of employment, (4) the divorce or legal separation of a covered employee from the employee's spouse, (5) a covered employee becoming entitled to Medicare benefits, (6) a dependent child ceasing to be a dependent child of the covered employee under the terms of the group health plan, and (7) with respect to certain retirees and their dependents, bankruptcy proceedings of an employer under Title 11 of the U.S. Code, commencing on or after July 1, 1986.
If I voluntarily leave my employment, is that considered to be a qualifying event?
Answer: Yes. Unless the covered employee was terminated due to gross misconduct, it does not matter whether the employee voluntarily terminated employment or was discharged.
What benefits are available under COBRA?
Answer: If a qualifying event occurs, each qualified beneficiary is entitled to elect to continue to receive coverage identical to that being provided under the plan to "similarly situated beneficiaries" to whom a qualifying event has not occurred.
If coverage for similarly situated beneficiaries under the plan is changed, coverage for qualified beneficiaries must be modified. The coverage may not be conditioned on the insurability of a qualified beneficiary.
What is the cost of continuation of coverage under COBRA?
Answer: For any period of COBRA continuation coverage, a group health plan can require a qualified beneficiary to pay an amount that does not exceed 102 percent of the applicable premium for that period.
Who pays for this continuation of coverage?
Answer: The qualified beneficiary who elects to continue coverage must pay for this coverage.
Should I be notified of my COBRA rights in the event that I am separated from my job?
Answer: Employers have a responsibility to notify its plan administrator of the employee's death, termination of employment, reduction in hours, Medicare eligibility or Title 11 proceedings within 30 days of the qualifying event. When the plan administrator is notified that one of these events has occurred, it will, in turn, notify the covered person(s) of the right to choose continuation coverage. However, the employee or a family member has the responsibility to inform the plan administrator of a divorce, legal separation, or a child losing dependent status within 60 days after the later of (1) the date of the qualifying event, or (2) the date that the qualified beneficiary would lose coverage due to the qualifying event. If notice is not timely, the group health plan does not have to offer the qualified beneficiary an opportunity to elect COBRA continuation coverage.
How long do I have to decide whether I want to continue my coverage under COBRA? Should I notify my employer of my intentions?
Answer: Generally, a group health plan can condition the availability of COBRA continuation coverage upon a qualified beneficiary's timely election of such coverage. The election period must begin on or before the date that the qualified beneficiary would lose coverage due to the qualifying event. The election period must not end before the date that is 60 days after the later of (1) the date that the qualified beneficiary would lose coverage due to the qualifying event, or (2) the date that the qualified beneficiary is sent notice of his or her right to elect COBRA continuation coverage. A qualified beneficiary must notify his or her employer or plan administrator of his or her election to continue coverage.
Can my coverage be terminated prior to the close of my eligibility period?
Answer: Generally, each qualified beneficiary has until at least 60 days after the date that the qualifying event would cause loss of coverage, to decide whether to elect COBRA continuation coverage. If the election is made during that period, coverage must be provided from the date that coverage would otherwise have been lost, unless the employer group no longer offers a group health plan.
If I am not eligible to continue coverage under COBRA, am I eligible under New York State law?
Answer: In certain circumstances a person may be eligible to continue coverage under New York State's law. If a covered person loses coverage because of termination of employment (for any reason) or loses membership in the class or classes eligible for coverage under the policy, the covered person is entitled to continue insurance for himself or herself and his or her eligible dependents, subject to the group contract's terms and conditions and certain other limitations.
In what circumstances would I be unable to continue coverage under New York law?
Answer: Continuation coverage will terminate for a person who after the date of election becomes eligible for Medicare benefits or for any employee or for a covered person who after the date of election becomes covered as an employee, member or dependent by any other insured or uninsured group arrangements which provide hospital, surgical or medical coverage.
My former employer has less than 20 employees. Am I entitled to continuation of my health insurance plan upon separation from their employment?
Answer: Yes. New York State law requires small employers (less than 20 employees) to provide the equivalent of COBRA benefits. You are entitled to 36 months of continued health coverage at a monthly cost to you of 102% of the actual cost to the employer which may be different from the amount deducted from your paychecks.
My job was terminated and the company went out of business. Can I continue my group health insurance?
Answer: COBRA coverage is a continuation of the same group coverage you had when you were working. Since the company went out of business, there is no group policy, therefore you cannot have COBRA coverage. You should look into obtaining individual health insurance.
How long can I maintain continuation coverage under State law?
Answer: The continuation of benefits will terminate at the first to occur of the following: (1) 36 months after the date that benefits under the policy would otherwise have terminated, (2) the end of the period for which premium payments were made, if the employee or member fails to make timely payment of a required premium payment, or (3) the date on which the group contract is terminated, or, in the case of an employee, the date his employer terminated participation under the group contract. However, if the group plan is replaced by similar coverage under another group contract, the covered person has the right to become covered under that other coverage for the balance of the period that he would have remained covered under the prior contract.
What is the cost of continuation of coverage under State law?
Answer: An employee or member electing coverage must pay up to 102% of the premium at the group rate for the benefits being continued under the group contract.
How much time do I have to elect to continue coverage under State law?
Answer: You must request continuation of coverage in writing within 60 days following the later of: (1) the date of termination ; or (2) the date the employee is given notice of the right of continuation by either his employer or the plan.
Why would I want to continue my health insurance coverage under either COBRA or New York State Law?
Answer: Continuing your health insurance through your employer allows you to keep the same coverage you had through your employer – with the same benefits and same doctors. You should compare the coverage you were receiving through your previous employer with the options available to you through the NY State of Health (NYSOH) or insurers in your area. If the benefit package offered through your employer fits your needs better than the options available to you as an individual, COBRA may serve as a helpful transition.
What other options are available?
Answer: You and your family have many new health insurance options available through NY State of Health: The Official Health Plan Marketplace. You can quickly compare health plan options and apply for assistance that could lower the cost of health coverage. Individuals and families may also qualify for free or low-cost coverage from Medicaid or Child Health Plus through the Marketplace. Anyone can apply.
Once my continuation period expires, either under COBRA or New York law, am I eligible to purchase a conversion contract?
Where can I get more information about these programs?
Answer: Check your health insurance policy to further determine options available upon termination of coverage. The contract should provide you with further information concerning your rights. You should also check with your employer or plan administrator.
If I feel my rights have been violated with respect to COBRA, who can I contact?
Answer: COBRA is a federal statute, the United States government is responsible for insuring compliance with its terms -- contact the U. S. Department of Labor.
Who can I write to about COBRA?
Office of Program Services
Pension & Welfare Benefits Administration
U. S. Department of Labor
200 Constitution Ave., N. W.
Washington, D. C. 20210
What about if I need information about New York State law?
Answer: Contact the Department's Consumer Assistance Unit at: (212) 480-6400 or 1-800-342-3736