COBRA Key Terms

COBRA is a lifeline for individuals who lose a job and health insurance benefits

Congress designed and implemented COBRA for the benefit of workers who lose a job and the health insurance benefits tied to that job. The plan provides for the temporary continuation of health insurance for employees, their spouses and children. COBRA expenses to a terminated employee are usually more expensive than their previous payments, but less expensive than other available insurance plans. Employees will find that COBRA provides them with lower premiums, but there are also other important benefits that come with COBRA. Most people will benefit greatly with COBRA coverage because this plan ensures that when applying for benefits at their next job, they will find coverage for pre-existing conditions. COBRA coverage includes expenses for physicians, inpatient and outpatient hospital stays, surgery and prescription drugs.

 

Safe harbor

COBRA insurance is not a long-term plan, but it is a safe harbor of health care coverage for employees between jobs. COBRA supplies continued health care coverage that usually comes in connection to a job. COBRA also extends the benefits of a safe harbor to spouses and dependents with a health factor or pre-existing condition that insurance companies will not cover if the employee does not have COBRA coverage during unemployment.
Try: The Internal Revenue Service is a source of information on many government programs, including COBRA and the safe harbor benefits.

Partial premium payments

Employers collecting premium payments for affected employees, their spouses and dependent children do not need to inform employees if they do not pay premiums or will lose their coverage. However, these same employers must inform affected individuals if they send partial premium payments. If employers receive a partial premium payment that includes a significant amount of the required payment, the employer must accept this as a payment in full or notify the individual of the deficit and allow enough time to send the required payment.
Try: Cobra Tips website is an excellent source of information where those interested in the benefits of COBRA will find answers to their questions.

Qualifying events

COBRA coverage is a great benefit for people, but there are qualifying events that provide eligibility for employees, their spouses and their dependents. Qualifying events include voluntary or involuntary termination of employments or a reduction in the hours of employment and the health care benefits connected to that job. Qualifying events for spouses and dependent children include divorce, separation or the death of the sponsor.
Try: The official website of the US Department of Labor is a good source for individuals seeking information on COBRA benefits.

Election period

Knowing the rules and regulations regarding COBRA can make a significant difference in costs and benefits for individuals. Eligible people should pay careful attention to the election period provisions or they will lose their rights for continued coverage of health insurance under COBRA. In order to enroll in COBRA, the affected employee, spouse and eligible children must sign up during the election period, which is 60 days after receipt of the notice from the employer confirming eligibility.
Try: Insure.com has comprehensive information on insurance and COBRA in particular.

Triggering event

Employers must offer COBRA insurance coverage to terminated employees in the event of six different triggering events. These events include the death or retirement of the covered employee or sponsor. Other triggering events include the bankruptcy of the company or reduction in the hours worked by the employee. Dependent children qualify for COBRA coverage when they lose their dependent status and the benefits of health insurance coverage based on the employment of one of their parents.
Try: Employee Benefits Institute of America covers the important benefits of COBRA on its website, EBIA .

Initial notice

Employers have certain obligations to their employees when they are hired and when they become eligible for COBRA benefits due to qualifying events. Each employer is obligated to provide an initial notice of eligibility for COBRA coverage to employees when they are hired. This initial notice of eligibility of COBRA coverage should include a summary of the plan benefits to new employees and their spouses.
Try: Cobra Health is an excellent source of information on the benefits and procedures for COBRA coverage.

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