The Consolidated Omnibus Budget Reconciliation Act, more commonly known as COBRA, lets you keep your group health plans for a period of time after you are no longer employed or experience a qualifying event which would otherwise cause you to lose coverage. It can be used to extend your existing group health coverages.
Group health coverages may include: health insurance, dental, vision, health reimbursement accounts, and flexible savings accounts. Note: If you have a Health Savings Account (HSA), you already own the account and can continue to use it. However if you no longer have HSA-compatible insurance, you may not contribute to the HSA.
You might want to consider COBRA coverage if:
What is a Qualifying Event? Common events include: termination of employment, reduction of hours, divorce or legal separation, cessation of dependent status, employee death, failure to return from FMLA, or certain employer bankruptcy.
How do I elect COBRA? Once you receive your Specific Rights notice, you have 60 days from the postmark to elect COBRA coverage. When we receive your election form, we will send you a coupon book covering the remainder of the insurance Plan Year and any insurance forms (if required). You must return all forms and premiums covering the period from your loss of coverage date.
How long can I continue coverage? As an employee, the coverage for yourself and covered dependents can be continued for 18 months for termination or reduction of hours. Covered dependents can continue coverage for 36 months as a result of divorce or legal separation, cessation of dependent status, employee entitlement of Medicare or employee death.
Why is my COBRA premium so high?
Unfortunately, COBRA is not cheap. While you were employed, the employer may have paid some or all of the premium for yourself and covered dependents. Once you go on COBRA, you pay the entire premium plus a 2% administration fee. Your specific rights notice will specify the monthly premium amount for each plan you are eligible to enroll in for COBRA.
TIP: You can elect each benefit separately. For example, you may decide to go to the Federal Exchange for health coverage instead of electing COBRA. However, you want to maintain your dental coverage. No problem! Just elect COBRA for dental coverage.
Can my COBRA premium change?
Yes. If the employer’s insurance premium increases, your COBRA premium will also increase.
Your first premium is due 45 days from your COBRA election. Subsequent premiums are due the 1st of each month but must be postmarked no later than the 30th. The insurance carrier has the right to suspend your coverage between the 1st and 30th, reinstating benefits when premiums are received.
Here’s how to pay your COBRA premium:
Has your employer switched to BRI from another COBRA Provider? Here’s what you’ll need to know about the transition.