Things You Should Know about COBRA Insurance
With healthcare costs often prohibitively expensive, health insurance is essential for just about everyone. Many obtain health insurance through their employers. Plans may end due to qualifying events, but that doesn’t stop the need for healthcare coverage. That’s where COBRA insurance comes into play. It allows those who qualify to pay for their most recent employer-based group coverage out of pocket.
COBRA Eligibility
Qualifying events make employees eligible for COBRA insurance. These events include divorce or the death of a spouse (instances that could separate you from the plan’s main beneficiary) but aren’t limited to family circumstances. Employees who lose their group health insurance because they quit, were fired, or had hours reduced will also qualify. They only have to have been enrolled for one day to be eligible.
How COBRA Works
COBRA insurance is the same employer-sponsored health plan your employees had before their coverage ended. Employees retain the same doctors, prescription coverage, and copays. Coverage is the same–if the employee has dental and vision insurance, their COBRA insurance will include that as well. The benefits begin as soon as the first premium payment is made. Coverage is retroactive to the date when the previous policy ended. Employees who choose COBRA insurance will be responsible for paying the whole premium, even if the employer was previously paying for some or all of it.
Employer Responsibilities
If you have 20 or more full-time employees, you must provide continued access to COBRA insurance if an employee’s group health plan coverage is terminated. Once employees experience a qualifying event, you have 45 days to send an election notice notifying them of the opportunity to restart their workplace insurance policy. They have 60 days from that point to decide to enroll back in the plan and 45 days to make the first premium payment. COBRA coverage can be terminated at any time (by the employee) but may last up to 18 months.
Gaps in healthcare coverage can make getting new policies at good prices more difficult. They are often associated with poor health and unmet healthcare needs, making insurance companies less interested in providing coverage. COBRA insurance helps those who qualify to avoid healthcare coverage gaps. Make sure you know your end of things regarding COBRA insurance so your employees can get the care they need.
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