After Coverage Ends - COBRA

Questions and Answers About
When Your Coverage Terminates - COBRA
Prepared By
The Employee Benefit Service Center

Q    I have several family members who are qualified beneficiaries. Can we make independent decisions? 
A    Yes. Each qualified beneficiary must be offered the opportunity to make an independent election to receive COBRA coverage. If the election made does not specify a different election for any of all of the qualified beneficiaries from the coverage on the day before the qualifying event, the election for COBRA coverage will be deemed to be as the coverage existed before the qualifying event.

Q     How much will COBRA cost me?
A      The notification you receive from the plan lists the premium cost to purchase COBRA coverage. The premium cost is based upon the type of coverage elected by you and your family members (i.e. single, family, other) and is based upon the premium for the coverage elected. The plan can also add to the premium based upon the reason you are on COBRA. For example, if you are in the normal COBRA time period of 18 months, 2% may be added to the premium. If you or a family member are disabled and covered on COBRA during the 19th through 29th month, 50% may be added to the premium. The premium is paid monthly.

Q    When is my COBRA premium due?
A    The first premium is due no later than 45 days after the date of your COBRA coverage election. Each subsequent premium is due no later than 30 days after the first day of the month for which you are paying for coverage. The total amount due should be paid; however, if a timely payment is made and is an amount deemed to be not significantly less than the plan requires, the plan will continue coverage. The plan will notify the qualified beneficiary that the payment was deficient and request the deficient amount within 30 days of notifying the qualified beneficiary of the deficiency. If the deficiency is not paid within thirty days, coverage will be terminated. An amount is not significant if, (1) it is less than $50 dollars, or, (2) it is less than 10% or the amount required. 

Q     Will I receive a bill for COBRA premiums due?
A     A letter will be sent explaining the amount due for the payments and when the payments are due. There will be no bill sent for subsequent premium payments and COBRA coverage will be terminated if payments are not received within the grace period. 

Q     Explain the maximum time periods for COBRA coverage.
A     Most people will be covered under COBRA coverage for a maximum of 18 months as a result of termination of employment or reduction in hours worked. If there is a disability extension, the COBRA coverage maximum is 29 months. If the covered employee becomes entitled to Medicare before experiencing a COBRA qualifying event, the maximum COBRA coverage period for qualified beneficiaries other than the covered employee is the later of,

• 36 months after the date of Medicare entitlement or,
• 18 months (29 for disability) after the covered employee’s termination of employment or reduction in hours worked.
  If the qualifying event was a result of divorce, legal separation, death of an employee or a dependent ceasing to meet the definition of a dependent, COBRA coverage is for a maximum of 36 months. 

Q     I am an employee covered by a group health plan and my spouse was just deemed disabled as defined by COBRA regulations. I have to reduce my hours to below the minimum for coverage and want to enroll for COBRA coverage. How long can I enroll and how much will it cost me?
A     Because a family member is disabled, as defined by COBRA regulations, you and your spouse and any dependents can enroll for 29 months of COBRA coverage. If the entire family enrolls, including your spouse, the cost will be 102% of the premium for the first eighteen months of coverage and 150% of the premium for months 19 through 29. If only you and other family members, but not your spouse enroll, you may still have 29 months of COBRA coverage, but the cost will only be 102% of the premium for the entire 29 months, because your spouse (the disabled individual) did not enroll.

Q    How does a qualified beneficiary become entitled to a disability extension?
A    Disability is determined under Title II or XVI of the Social Security Act and is satisfied if you become continuously disabled before the first day of COBRA coverage or at any time during the first 60 days of COBRA coverage. You must notify the plan within 60 days of receiving the determination that you are disabled and before the end of your original 18 month COBRA coverage period. The disability entitles each and every qualified beneficiary in your family, independently, and for those disabled or not, to a maximum of 29 months of COBRA continuation coverage. The disability can be on an employee, spouse or dependent.
 

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Notice: This information is prepared exclusively for the use
of clients of The Employee Benefit Service Center