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Cobra: Healthcare Continuing Coverage Cheat Sheet by

Continuing Healthcare Coverage after employment ends
usa     healthcare     continuation     coverage     cobra

Introd­uction: Contin­uation of Health Coverage

The Consol­idated Omnibus Budget Reconc­ili­ation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circum­stances such as voluntary or involu­ntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified indivi­duals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opport­unity for a temporary extension of health coverage (called contin­uation coverage) in certain instances where coverage under the plan would otherwise end.

COBRA outlines how employees and family members may elect contin­uation coverage. It also requires employers and plans to provide notice.

What’s Guaranteed to Employees?

Continued health care coverage to employees, former employees and/or qualified benefi­ciaries after the loss of previous coverage as a result of certain qualifying events
Coverage continues at the same level provided before the qualifying event

Examples of Qualifying Events

Termin­ation
Reduction of hours
Partic­ipant becomes disabled
Death or divorce
Dependant child loses dependant status

Notice Requir­ements

General notice describing COBRA rights must be provided to partic­ipants within 90 days after partic­ipation in health care plan begins
Employers generally must provide plan admini­str­ators with notice within 30 days of the occurrence of a qualifying event
Plan admini­strator must provide partic­ipants with an election notice of COBRA rights within 14 days of a qualifying event (44 days if the plan admini­strator is also the employer)
 

COBRA

Time period allowed to Elect Coverage

60 days from the date of the qualifying event or the date the election notice is provided, whichever is later

Can Partic­ipant be required to pay full Premiums?

Yes, including any portion of the premium generally by the employer on behalf of active employees.

Length of Coverage

18 months in cases involving termin­ation and/or a reduction in hours
29 months in certain cases involving disability
36 months in cases involving the death of a covered employee, or divorce

When can the Coverage be Cut Off?

A partic­ipant fails to pay required premiums
Employer discon­tinues health care plan
Under certain circum­stances where partic­ipant obtains subsequent coverage

Top COBRA Tips

Ensure that all notices go out to employees and partic­ipants within the time required by the Act
Notify all partic­ipants about any changes in health benefits

What are the Penalties for failing to comply?

Monetary penalties for the Employer

Download the Cobra: Healthcare Continuing Coverage Cheat Sheet

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