If you and your dependents are no longer qualified for coverage as a State of Ohio employee, you and your dependents may maintain coverage under COBRA for 18, 29, or 36 months.
What is COBRA insurance and how does it work?
COBRA is a federal health-insurance law. COBRA allows you to keep your existing employer-based coverage for at least the following 18 months if you lose or leave your employment. Your current health-care plan will suddenly be more expensive. Under COBRA, you are responsible for the entire payment, including the portion that your former employer used to pay.
Does COBRA cost the same as my insurance?
It’s easy to lose track of how much your job-based health insurance costs, especially if your company contributed to the cost. When you leave, become part-time, or get fired, all of that changes. If there’s one place where COBRA’s bite can be felt, it’s in your wallet!
Your COBRA premiums (or payments) will be equivalent to the total cost of your employer-sponsored health insurance premium, plus a 2% administration fee. If you’ve been covered by your company for a long, the cost of continuing coverage on your own will be exorbitant.
In 2020, the average yearly premium for employer-sponsored health insurance for individuals was $7,470 and $21,342 for families.
4 Employers, on average, funded 83 percent of individual costs and 74 percent of family costs. 5
You’re responsible for the entire cost of COBRA insurance. That means you may be paying an average of $623 per month for solo coverage or $1,778 per month for family coveragepossibly more!
We understand that those figures appear to be high (and they are). But there’s something even more costly: having to foot the price for a medical emergency without insurance. Trust us when we say that paying COBRA premiums is a lot better than risking medical bankruptcy. It’s the least of two evils by a long shot.
Does COBRA insurance kick in automatically?
If you leave an eligible job who offered group health insurance, COBRA is immediately available to you, but participation in the program is not. You must fill out an enrollment form and pay your first insurance premium within the timeframe given. You will not be enrolled in COBRA and will be ineligible to participate in the program retrospectively unless you accomplish these items within the enrollment period.
How long is COBRA retroactive?
After electing COBRA coverage, a qualifying beneficiary has 45 calendar days from the date of election to pay all retroactive premiums to the plan or its designee. The premium for the period between the date of loss of coverage to the date of election is referred to as the retroactive premium payment.
What are COBRA qualifying events?
The Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act (ERISA) were amended by the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), which required employers with 20 or more employees to provide temporary continuation of group health coverage in certain situations where it would otherwise be terminated.
COBRA rules apply to group health plans offered by state or local government employers under Title XXII of the Public Health Service (PHS) Act, 42 U.S.C. 300bb-1 through 300bb-8.
To distinguish it from the ERISA and Internal Revenue Code regulations that apply to private businesses, it is also referred to as “public sector” COBRA.
The Centers for Medicare & Medicaid Services (CMS) of the United States Department of Health and Human Services has jurisdiction over the COBRA continuation coverage requirements of the Public Health Service Act that apply to state and local government employers, such as counties, municipalities, and public school districts, and the group health plans that they sponsor.
A qualified beneficiary is someone who qualifies for COBRA continuing coverage because they were covered by a group health plan the day before a “qualifying occurrence.”
The following individuals may be eligible beneficiaries depending on the circumstances: a “covered employee” (which includes active employees, terminated employees, and retirees); a covered employee’s spouse and dependent children; any child born to or adopted by a covered employee during the period of COBRA coverage; agents; self-employed individuals; independent contractors and their employees; directors of the employer; and, in the case of public sector group health plans, political appointees and elected officials.
Qualifying events are occurrences that would cause a person’s health coverage under a group health plan to be terminated.
The sort of qualifying event will decide who is eligible for COBRA coverage and how long they will be eligible.
Qualifying events include the death of a covered employee, the termination or reduction of hours of employment of a covered employee, the covered employee becoming eligible for Medicare, divorce or legal separation from the covered employee, or a dependent child ceasing to be a dependent under the plan’s generally applicable requirements.
COBRA coverage begins on the day of the qualifying event, if all due premiums are paid, and the length of COBRA coverage is determined by the sort of qualifying event that led the qualified beneficiary to lose group health plan coverage.
The sole qualifying event for “covered employees” is cessation of employment (whether voluntary or involuntary), including retirement or a reduction in work hours.
COBRA is for eighteen months in this scenario.
COBRA for the spouse or dependent child lasts 36 months if the qualifying event includes the covered employee’s death, divorce or legal separation from the covered employee’s spouse, or the covered employee becoming eligible for Medicare.
In general, a COBRA qualifying event must be either a termination of employment or a reduction in the covered employee’s work hours.
Second, the disabled status of the covered employee must be determined under title II or chapter XVI of the Social Security Act.
Third, regardless of whether the impairment began before or during the first 60 days of COBRA continuation coverage, the individual must be disabled at some point during that time.
Fourth, while the disability must begin within the first 60 days of COBRA coverage, the title II or XVI determination can be made at any point during the 18-month COBRA coverage period that began with the qualifying event.
Finally, the covered employee must tell the plan administrator about the disability finding within 60 days of receiving the determination, but no later than the end of the 18-month period of continuation coverage applicable to the qualifying event.
Furthermore, if a definitive finding is made under section II or XVI that the individual is no longer incapacitated, the prolonged period of COBRA comes to an end.
It’s worth noting that for the 11-month extension, the group health plan can charge up to 150 percent of the applicable premium.
Separate rules apply to the employer and the administrator of the group health plan.
If an employer is subject to COBRA requirements, it must notify the administrator of the group health plan within 30 days of an employee’s termination or reduction in hours.
The plan administrator is obligated to advise the individual of his or her COBRA rights within 14 days of receiving such notification.
If the employer is also the plan administrator and sends out COBRA notices directly, he or she has the entire 44-day time to send out a COBRA election notice.
Q11: When do I have to notify my plan administrator that a qualifying event has occurred?
If you divorce or lawfully separate from the covered employee, or if a dependent child no longer fulfills the requirements to be a covered dependent (typically by reaching a certain age), you must tell the plan administrator within 60 days of the qualifying event.
Q12: What is the next step in the procedure once the health plan administrator receives proper notice of a qualifying event?
When a qualifying event occurs, plan administrators must notify qualified beneficiaries of their right to elect COBRA coverage.
Because qualified beneficiaries have separate election rights, they must be individually notified.
If all qualified beneficiaries live at the same address, plan administrators can send separate election notices to each qualified beneficiary in a single mailing addressed to both the employee and spouse, or send a single notice that clearly identifies all qualified beneficiaries covered by the notice and explains each person’s separate and independent right to elect COBRA continuation coverage.
After that, each qualified beneficiary has 60 days to decide whether or not to keep their coverage.
Separate election notices must be provided to qualifying beneficiaries who do not live at the same address as the plan administrator, if the plan administrator knows their addresses.
At the time the spouse’s notification is sent by the plan administrator, it is treated as a notification to all qualified dependent children residing with the spouse.
Notifications must be delivered in person or sent via first-class mail.
- The rights and obligations of a qualified beneficiary with regard to COBRA coverage extensions, as well as
Qualified beneficiaries must follow the instructions in the election notification to notify the plan administrator of their election. Qualified beneficiaries must be provided at least a 60-day election period during which they can choose whether or not to elect COBRA coverage. This period begins on the later of the qualifying event’s date or the date the COBRA election notice is sent. COBRA coverage is retroactive if the qualified beneficiary elects and pays for it.
The employer or group health plan administrator should indicate the address to which premium payments should be submitted, as well as the amount of the premium due and the due date, on the COBRA election notice.
A group health plan cannot compel payment for any period of COBRA continuation coverage before 45 days have passed after the qualified beneficiary first elected continuation coverage.
Q17: When do I have to submit payments for all future COBRA premiums once the initial one is made?
All premium payments, with the exception of the first, must be made within 30 days of the due date (due date is set by the group health plan).
COBRA coverage is usually paid in full by the beneficiary, while some companies choose to subsidize COBRA coverage.
If the employer does not subsidize COBRA, the COBRA premium cannot exceed 100% of the cost of the group health plan for similarly situated individuals who have not experienced a qualifying event, including both the portion paid by employees and any portion paid by the employer prior to the qualifying event, plus an additional 2% for administrative costs.
Please be aware that an employer may charge up to 150 percent for an 11-month COBRA disability extension.
Are COBRA payments tax deductible?
COBRA insurance premiums are tax deductible because they are paid totally after-tax by you. Premiums paid for medical coverage purchased through an insurance marketplace are tax deductible as a medical expense.
What is a COBRA package?
Under certain circumstances, such as voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce, and other life events, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers and their families who lose their health benefits to choose to continue group health benefits provided by their group health plan for a limited period of time. Individuals who meet certain criteria may be compelled to pay the entire premium for coverage up to 102 percent of the plan’s cost.
COBRA requires that group health plans sponsored by employers with 20 or more employees in the previous year provide employees and their families with the option of a temporary extension of health coverage (known as continuation coverage) in certain situations where the plan’s coverage would otherwise end.
COBRA explains how employees and family members can choose to keep their health insurance. It also mandates that employers and plans give notification.
Does COBRA include prescription coverage?
If you previously had coverage for pharmacy prescriptions, COBRA will cover them. The COBRA statute allows you and your dependents to keep the same health-care coverage that you had with your previous employment. In terms of your medicine, nothing has changed.