What is COBRA?
As more people face job cuts in this slowing economy, the issue of COBRA medical insurance becomes more important. COBRA is short for "Consolidated Omnibus Budget Reconciliation Act", a federal law in effect since 1986. COBRA permits you and your dependents to continue in your employer's group health plan after your job ends.
If your employer has 20 or more employees, you may be eligible for COBRA continuation coverage when you retire, quit, are fired, or work reduced hours. Continuation coverage also extends to surviving, divorced or separated spouses; dependent children; and children who lose their dependent status under their parent's plan rules. You may choose to continue in the group health plan for a limited time and pay the full premium (including the share your employer used to pay on your behalf) plus a 2% administrative fee. COBRA continuation coverage generally lasts 18 months, or 36 months for dependents in certain circumstances. See also State Continuation Coverage.
Federal legislation allows for continuation of insurance on a self-pay basis when no longer eligible for group coverage under certain qualifying events. Among the provisions of this legislation that deal with health care coverage are the following: (1). Employer-provided medical plans can no longer require Medicare to be primary payer for participants age 70 and over. (2) Medicare coverage is extended to state and local government employees. (3) Almost every group health plan must provide each participant and qualified beneficiary under the plan the option to pay for continued coverage under the plan in the event coverage would otherwise have ceased as a result of a number of "qualifying events."
COBRA allows you to continue health coverage for up to 18 months after your coverage as an insured employee ends for a cost of 102% of the full cost premium. If your continuation coverage is extended to 29 months due to disability, your premium is 150% of the applicable premium for the additional 11 months of coverage. You will be billed directly by the Group Insurance Commission. Apply in writing to the GIC using the COBRA form. |
