COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a government program that helps people stay on their group health insurance plans even after they leave their jobs. When it comes to participating in this program, employees and employers have to obey the guidelines that are set forth by the federal government.
How COBRA Coverage Works
When you work for an employer who is required to have COBRA, you can continue using your health insurance plan after you no longer work for the company. You can take advantage of this coverage regardless of whether you are fired or voluntarily leave the company. It may also be available to you if you are moved from a full-time to a part-time position and you lose access to your health insurance benefits. To gain this coverage, you simply have to make the premium payments on the insurance.
Which Companies Offer COBRA
COBRA is a widespread form of coverage that is offered by most companies. If a company has more than 20 employees, it has to offer COBRA continuation coverage to its employees when they leave. The company also has to have a health insurance plan before the employee leaves for the employee to take advantage of COBRA. If the company does not have health insurance, it does not have to get a plan just to provide COBRA coverage to the employee when she leaves.
Qualifying Event
To initiate COBRA coverage, an individual must experience a qualifying event. Qualifying events include being terminated, leaving your job or having your work hours reduced. Spouses and children who are on the insurance plan can also become eligible for COBRA through these qualifying events. When a qualifying event occurs, the company has to notify the insurance company within 30 days. This alerts the insurance company to the event and then the employee or family member has to choose whether or not he wants to get on COBRA.
Election Notice
Once the qualifying event occurs and the insurance company has been notified, the employee has the opportunity to opt in to COBRA coverage. The employer has 14 days to give the election notice to the employee after notifying the insurance company. Once this happens, the employee has 60 days to decide whether or not he wants to continue coverage through COBRA. The employee must notify the employer, who then tells the insurance company. Then the employee must start making premium payments to the employer for the insurance coverage.
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