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 original coverage is terminated.
What Does a Group Health Plan Cover?
A group health plan covers medical care (i.e., care related to the diagnosis, cure, treatment, or prevention of disease). A common misconception is that medical care includes disability insurance, but disability insurance only replaces wages that were lost as a result of the disability.
Do I Have a Right to Continued Health Care Coverage When My Job Ends?
Yes. If you are covered by COBRA, your former employer must notify the administrator of the group health care plan that your job has ended within 30 days. Then, the administrator must notify you of the right to continue coverage within 14 days of being notified by your former employer. 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 that an employer must notify an employee about the option to continue coverage after the original coverage 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:
- The premium due dates
- The right of the employee to elect individual coverage
- When the election period begins
When Does the Period of Continued Coverage Begin?
The 18 month allowance period for continued coverage is most commonly triggered by two "qualifying events":
- Reduction in hours of employment; or
- Termination of employment by the employee or employer.
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 lose or quit their job with that employer afterwards.
If My Rights under COBRA Have Been Violated, What Should I Do?
If you think that your employer has violated your rights, then you should immediately consult an employment lawyer. A qualified 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 attorney familiar with employee benefits rights can help prepare all the paperwork and represent you in court.