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C.O.B.R.A. And Your Rights: What To Know
C.O.B.R.A. stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. The act was passed by Congress in 1986 and it requires certain employers to provide, at group rates, continued health insurance coverage for up to three years for divorced persons, widows, spouses of retiring workers and their children. These benefits must also be provided for workers and their dependents when the worker is terminated (for reasons other than gross misconduct) or who has a reduction in hours.
At Scott Law Group, PLLC, our goal is to provide clients with the information and representation they need to confidently move forward with their lives. Below is some general information regarding C.O.B.R.A. benefits. For information tailored to you and your unique situation, we encourage you to reach out to our attorneys.
Are All Employees Affected By C.O.B.R.A.?
No. The Act affects employers who:
- Have 20 or more employees
- Are not covered by governmental or church plans
How Long Will Coverage Under C.O.B.R.A. Last?
If you and your spouse are divorcing, you can remain covered by your ex-spouse’s employer for up to three years. Widows, spouses of retiring workers and children who are no longer dependent can also be covered for up to three years.
What Kind Of Coverage Can I Obtain?
C.O.B.R.A. requires that employers offer identical coverage to C.O.B.R.A. recipients as is provided to any other beneficiary. If the plan “core” or “basic” coverage also offers options that may be added (such as dental coverage), you may elect to receive only the core coverage, or as many additional benefits as you wish.
How Do I Get Coverage Under C.O.B.R.A.?
If you and your spouse are divorcing, and your spouse is employed by a company that is affected by C.O.B.R.A., you are a qualified beneficiary. It is your spouse’s responsibility to notify the plan administrator of your divorce within 60 days of the date of the final divorce decree. Once you have notified the plan administrator, the company has 14 days to send you information describing your rights under C.O.B.R.A. You will then have 60 days to decide if you want to be covered under C.O.B.R.A. Other qualified beneficiaries include dependent children, spouses of retiring employees and widows of previous employees. All qualified beneficiaries are subject to the same rules.
The employer will no longer pay your premiums once you elect C.O.B.R.A. You or your ex-spouse will have to pay these premiums and this may also have an effect on how much coverage you want beyond the basic or core coverage. The employer will charge you the same group rate that an employee must pay. However, a maximum surcharge of 2 percent can be charged to you by the company for administrative costs. The employer also has to allow you to pay the premium in monthly installments if you would like.
Is There Any Way That My Coverage Can Terminate Before The Three Years?
Yes. In the following circumstances, your coverage would terminate:
- If the employer should decide not to offer a group health plan to any employee
- If you or your ex-spouse fail to pay your premium
- If your ex-spouse gets another job or if you become eligible for Medicare or certain Social Security benefits
If I Remarry, Will I Lose My C.O.B.R.A. Health Insurance?
It depends. If you remarry but do not receive coverage under your new spouse’s group health plan, you may retain your C.O.B.R.A. coverage. To lose your C.O.B.R.A. coverage, you must remarry and become covered under another group plan.
Are There Any Special Conditions That Might Exclude Me From Coverage?
Usually not. In most cases, you are not required to have a physical exam. If your deductible has been met for that year, it will carry over to your separate policy. Also, you will not lose coverage because of preexisting conditions. This means that any ongoing illness or condition you have that was covered prior to divorce will still be covered by your policy under C.O.B.R.A.