Submission of premiums, or acceptance of premiums by UnifyHR, does not indicate that coverage is in force. If your coverage is canceled for non-payment or late payment of premiums, it cannot be reinstated. Continuation coverage under COBRA generally lasts for 18 months due to employment termination or a reduction in hours worked.
Certain qualifying events lead to a maximum of 36 months of continuation coverage. These "month" qualifying events include the death of an employee, the covered employee's divorce or legal separation, or a dependent child's losing eligibility as a dependent child.
In limited circumstances, the covered employee's entitlement to Medicare may also be a qualifying event. Continuation coverage may end before the date noted above in certain circumstances like failure to pay premiums, fraud, or the individual becomes covered under Medicare or another group health plan.
The plan can charge qualified beneficiaries an increased premium, up to percent of the cost of coverage, during the month disability extension. The requirements are: The Social Security Administration SSA must determine that the disabled qualified beneficiary is disabled before the 60th day of continuation coverage; and, The disability continues during the rest of the initial month period of continuation coverage.
The disabled qualified beneficiary or another person on his or her behalf also must notify the plan of the SSA determination. The plan can set a time limit for providing this notice of disability, but the time limit cannot be shorter than 60 days, starting from the latest of: The date on which SSA issues the disability determination; The date on which the qualifying event occurs; The date on which the qualified beneficiary loses or would lose coverage under the plan as a result of the qualifying event; or The date on which the qualified beneficiary is informed, through the furnishing of either the SPD or the COBRA general notice, of the responsibility to notify the plan and the procedures for doing so.
The right to the disability extension may be terminated if SSA determines that the disabled qualified beneficiary is no longer disabled. The plan can require disabled qualified beneficiaries to provide notice when such a determination is made. The plan must give the qualified beneficiaries at least 30 days after the SSA determination to provide such notice.
An extension of coverage due to a determination of disability is available only if you notify UnifyHR of the disability determination. This notice must be provided within 60 days as described above. To provide notice, you must use the form titled "Notice of Disability" available from UnifyHR, and you must follow the procedures outlined in the notice.
Additional information is available in the "Notice Procedures" section later in this document. Second qualifying events are: Death of the covered employee Divorce or legal separation of the covered employee and spouse Medicare entitlement only in certain circumstances The loss of dependent child status under the plan. The additional period of coverage is available only if the second event would have caused the qualified beneficiary to lose coverage under the plan assuming the first event had not happened.
An extension of coverage due to a second qualifying event is available only if you notify UnifyHR that the second qualifying event has happened. This notice must be provided within 60 days after the date of the second qualifying event. To provide notice, you must use the form titled "Notice of Second Qualifying Event" available from UnifyHR, and you must follow the procedures outlined in the notice. You can lose COBRA coverage early before the maximum period of coverage expires for the following reasons: You fail to make full payment for coverage on a timely basis Your former employer ceases to maintain any group health plan You become covered under another group health plan after electing continuation coverage You become entitled to Medicare benefits after electing continuation coverage You engage in conduct that would justify the termination of your coverage such as fraud If your continuation coverage is terminated early, you will receive a notice that outlines the date coverage will terminate, the reason for termination, and any rights you may have under the plan or applicable law to elect alternative coverage.
This notice will also include instructions for filing an appeal. If you decide to terminate your COBRA coverage early, you generally won't be able to get a Marketplace plan outside of the open enrollment period. More information about the Marketplace is available below. You should compare your other coverage options with COBRA continuation coverage and choose the coverage that is best for you. For example, if you move to other coverage, you may pay more out of pocket than you would under COBRA because the new coverage may impose a new deductible.
When you lose job-based health coverage, it's important that you choose carefully between COBRA continuation coverage and other coverage options, because once you've made your choice, it can be difficult or impossible to switch to another coverage option.
What is the Health Insurance Marketplace? Being offered COBRA continuation coverage won't limit your eligibility for coverage or a tax credit through the Marketplace. If you elect through the Marketplace, you may experience a gap in coverage between the date you lose coverage under the group health plan, and the date coverage begins through the Marketplace you will not experience a gap if you elect and pay for COBRA continuation coverage. When can I enroll in Marketplace coverage? To find out more about enrolling in the Marketplace, such as when the next open enrollment period will be and what you need to know about qualifying events and special enrollment periods, visit www.
Once you've exhausted your COBRA continuation coverage and the coverage expires, you'll be eligible to enroll in Marketplace coverage through a special enrollment period, even if Marketplace open enrollment has ended. Can I enroll in another group health plan? Other options, like coverage on a spouse's plan or through the Marketplace, may be less expensive. Provider Networks : If you're currently getting care or treatment for a condition, a change in your health coverage may affect your access to a particular health care provider.
You may want to check to see if your current health care providers participate in a network as you consider options for health coverage. Drug Formularies : If you're currently taking medication, a change in your health coverage may affect your costs for medication - and in some cases, your medication may not be covered by another plan.
You may want to check to see if your current medications are listed in drug formularies for other health coverage. Severance payments : If you lost your job and got a severance package from your former employer, your former employer may have offered to pay some or all of your COBRA payments for a period of time. In this scenario, you may want to contact the Department of Labor at to discuss your options. Service Areas : Some plans limit their benefits to specific service or coverage areas - so if you move to another area of the country, you may not be able to use your benefits.
You may want to see if your plan has a service or coverage area, or other similar limitations. Other Cost-Sharing : In addition to premiums or contributions for health coverage, you probably pay copayments, deductibles, coinsurance, or other amounts as you use your benefits.
You may want to check to see what the cost-sharing requirements are for other health coverage options. Therefore, despite the group rates being available for the COBRA continued plan in the post-employment period, the cost to the ex-employee may increase significantly when compared to prior insurance costs.
In essence, the cost remains the same but has to be borne completely by the individual with no contribution from the employer.
COBRA may still be less expensive than other individual health coverage plans. It is important to compare it to coverage the former employee might be eligible for under the Affordable Care Act , especially if they qualify for a subsidy. The employer's human resources department can provide precise details of the cost.
If you have lost your health insurance due to job loss during the economic crisis, you qualify for a "special enrollment" period on the federal exchanges , which gives you 60 days to sign up. COBRA coverage can end prematurely in the following cases:. An individual who opts for COBRA coverage is able to continue with the same physician, health plan, and medical network providers. COBRA beneficiaries also retain existing coverage for preexisting conditions and any regular prescription drugs.
The plan cost may be lower than other standard plans, and it is better than remaining uninsured as it offers protection against high medical bills to be paid for in case of any sickness.
Some of the most prominent of these include the high cost of insurance when it is borne entirely by the individual, the limited period of coverage under COBRA, and the continued dependency on the employer. If the employer opts to discontinue the coverage, an ex-employee or related beneficiary will no longer have access to COBRA.
A new plan may change the coverage period and number of available services, for example, and it may increase or lower deductibles and co-payments. A potential COBRA beneficiary also can explore, for example, whether they may qualify for a public assistance program such as Medicaid or other state or local programs.
However, such plans may be limited to low-income groups and may not offer the best care and services compared to other plans. Healthy individuals can explore the option of a low-cost healthcare discount plan.
But these plans don't count as insurance coverage, which can make it difficult to get health insurance in the future since signing up for one of these plans means that insurance coverage is considered to have been interrupted. If you're considering COBRA coverage but you're concerned about the differences between the cost of insurance coverage through this program and the cost of insurance with the support of an employer, there are a number of important considerations to keep in mind.
When you lose your job, you generally lose your flexible spending account FSA. If a job loss is threatened, you are allowed to spend your entire year's contribution to the FSA before you become unemployed. Upon choosing COBRA, you can change your plan during the employer's annual open enrollment period and opt for a less expensive plan like a preferred provider organization PPO , or health maintenance organization HMO.
Tax deductions might also help reduce the burden of higher premiums. While filing the annual tax returns, you are allowed to deduct COBRA premiums and other medical expenses exceeding 7.
You can achieve additional savings by reducing other healthcare expenses, such as switching to generic drugs or buying larger supplies at a discount , and visiting a low-cost community or retail clinic for basic healthcare services. Finally, you can utilize the funds of your health savings account HSA to pay COBRA premiums as well as medical expenses, which could significantly reduce the sting of losing your health insurance benefits.
It's important to note that making timely payments on COBRA premiums is essential to maintaining coverage for the duration of your eligibility. Payment is typically designed to cover a period that is retroactive, going back to the date of the loss of coverage and the qualifying event that established eligibility.
If you do not make your COBRA payments on time but you do within the grace period for that period of coverage, there is the possibility that your coverage will be canceled until payment is received, at which point coverage will be reinstated. You can use your health savings account HSA to pay COBRA premiums as well as medical expenses, which could significantly reduce the sting of losing benefits. Currently, the Departments of Labor and Treasury maintain jurisdiction over private-sector group health plans, while the Department of Health and Human Services is responsible for public-sector health plans.
However, these agencies are not necessarily heavily involved in the process of applying for COBRA coverage or related aspects of the continued coverage program. This coverage ended Dec. Employers recoup the premiums through Medicare tax credits. You are eligible for the COBRA premium subsidy if you lost coverage due to a reduction in hours or involuntary termination of employment.
If, however, you are eligible for other group health plan coverage or Medicare, you will lose eligibility for the COBRA subsidy. You are required to self-report your eligibility for other coverage to the COBRA plan and will face a tax penalty if you do not.
In order to begin COBRA coverage, an individual must confirm that they are eligible for assistance according to the requirements listed above. Typically, an eligible individual will receive a letter from either an employer or a health insurer outlining COBRA benefits. Some individuals find this notification difficult to understand because it includes a large amount of required legal information and language.
If you have any difficulty determining whether you are eligible for COBRA or how to begin coverage through this program, contact either the insurer or your former employer's HR department.
For individuals either not eligible for COBRA or those searching for alternatives, there are other options, such as a spouse's health insurance plan. For individuals either not eligible for COBRA or those searching for alternatives, there are other options. In some cases, a spouse's health insurance plan may be a possibility. Or you might explore your options on the federal health insurance marketplace or a state insurance marketplace.
Loss of a job will open up a special enrollment period. As indicated above, Medicaid programs and other short-term policies designed for those experiencing a gap in health coverage may also be available to you. Health insurance professionals typically discourage individuals from electing to go uninsured entirely , as the possibility of severe downsides is high—especially during an uncertain time.
All rights reserved. Privacy Policy License 0H September 20, Brian Gilmore Compliance. Share on linkedin. Share on facebook. Share on twitter. Share on email. There are two main pieces to this general rule: a. Open Enrollment The COBRA rules require that employers provide qualified beneficiaries with the same open enrollment rights as similarly situated active employees.
Who is a qualified beneficiary? Who is an employee and who is a covered employee? Brian Gilmore. He assists clients on a wide variety of employee benefits compliance issues. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law. The information provided is of a general nature and an educational resource.
It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document.
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