Employee Group Health Plans and Coverage After Termination

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What Is COBRA for?

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal program that makes sure employees covered under ERISA are not deprived of group health coverage after their coverage is terminated.

What Does a Group Health Plan Cover?

A group health plan covers medical care, i.e., diagnosis, cure, treatment, or prevention of disease. A common misconception is that medical care includes disability insurance, but disability insurance only replaces lost wages.

Under COBRA, Do I Have a Right to Continued Health Care Coverage After My Job Has Ended?

Yes, if covered by COBRA your former employer must notify the administrator of the group health care plan within 30 days. The administrator then must notify you of the right to continue coverage within 14 days. Continued coverage extends for a maximum period of 18 months thereafter.

How Must Notification of the Option to Continue Coverage Be Given?

There is no specified way an employer must notify an employee about the option to continue coverage after it has terminated. The general rule is that the employer must make a good faith effort to notify the employee of the option. Accepted methods of notification include verbally notifying the employee or sending a written notice through the mail.

What Information Must Be Included in the Notice?

The notice must contain the following elements:

When Does the Period of Continued Coverage Begin?

The 18 month allowance period for continued coverage is most commonly triggered by two "qualifying events":

NOTE: If an employee chooses to have continued coverage after a reduction in working hours, the employee CANNOT choose to restart their 18 month coverage period if they loose or quit their job with that employer afterwards.

If I Think My Rights Under COBRA Have Been Violated, What Should I Do?

Immediately consult a lawyer. A lawyer will be able to advise you of your rights as an employee covered under COBRA and what kind of benefits you are entitled to. If you need to go to court to get your COBRA problem resolved an employee benefits lawyer can help prepare all the paperwork and represent you in court.

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Last Modified: 12-28-2011 02:47 PM PST

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