- Who qualifies for COBRA? You qualify for COBRA if you work for a private sector, state or local government employer that offers a group health insurance plan, with at least 20 employees covered under the plan.
- When you leave your employer under a qualifying event, you may apply for a continuation of coverage for up to 18 months under your former employer’s group health plan. Your employer must notify you of your COBRA benefits within 30 days, and you must accept these benefits within 60 days after you leave your employer.
- What is a qualifying event? A qualifying event is when you lose your job through a voluntary or involuntary termination of employment for any reason other than “gross misconduct.” A reduction in the number of hours of your employment would also be considered a qualifying event.
- How much will I pay for my coverage? Your monthly premium will be 102% of the premium paid by your former employer.
- What happens after 18 months on COBRA? Once you complete your 18 months of COBRA you may be eligible for State continuation coverage such as Cal COBRA, which will give you an additional 18 months of coverage.
YOU ELECT COBRA – DO YOU QUALIFY FOR THE 65% SUBSIDY?
- You qualify for the subsidy if you were laid off between the dates September 1, 2008 through December 31, 2009. You will be eligible for the 65% subsidy (you would pay 35%) of your COBRA premium for up to 9 months. The subsidy only applies to coverage that began on or after February 17, 2009.
- In December of 2009, the subsidy was extended to include anyone laid off by February 28, 2010. The extension now applies to COBRA coverage that began on or after February 17, 2009 and lasts for a total of 15 months
- On March 3, 2010 eligibility for the subsidy was extended to include anyone who becomes eligible for COBRA on or before March 31. 2010
WHAT ARE MY ALTERNATIVES TO GOING ON COBRA?
- You are employed (within 60 days) by another company that offers group health coverage.
- You obtain your own individual health insurance coverage for you and your dependents.
- Why should I obtain my own individual health insurance coverage? In most States, especially California, the cost of COBRA coverage is 50% to 150% more expensive than individual coverage (remember this is what your former employer actually paid for your coverage). The reason that group and COBRA coverage is more expensive is because there are no restrictions of coverage for pre-existing conditions.
WHAT HAPPENS IF THERE ARE PRE-EXISTING CONDITIONS?
- If you or any members of your family have pre-existing conditions that were covered under your former employer’s group coverage, you will need to elect COBRA coverage. You only need to elect COBRA coverage for the actual family member with the pre-existing condition.
- If you elect COBRA because of a pre-existing condition, and you are not employed by a company with a group health plan, you must do the following in order to maintain health insurance coverage:
- Remain on COBRA for the full 18 months.
- Elect and remain on any State COBRA extension, such as Cal COBRA for the full period of time (usually an additional 18 months)
- After you have completed the full 18 or 36 months, you will be eligible to apply for an individual guaranteed issue health insurance policy.
- A guaranteed issue policy means that all pre-existing conditions will be accepted and covered under the new policy.
- You must apply for a guaranteed issue individual policy within 63 days of exhausting all COBRA benefits.