Health Insurance Cobra Basics

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Basics For COBRA

Are you leaving a job, but want to hold on to your health insurance benefits? Here are the rules that allow you to maintaining those benefits:

Certain individuals may elect to receive COBRA continuation coverage when they have a COBRA Qualified Event and that individual loses plan coverage because of that event. Generally, the following must be true for an individual to qualify for COBRA:

• The employer must have 20 or more employees.
• The individual was covered under the plan at the time of the event.
• The loss of coverage must be for a COBRA-listed Qualified Event (QE) such as termination or divorce. Note: losses of coverage for non-COBRA listed events (such as dropping coverage under your employer's plan to take coverage under your spouse's employer's plan) do not constitute a COBRA QE.
• Those individuals who qualify are called Qualified Beneficiaries (QBs), and include:
  
• Any individual listed below who, on the day before a Qualifying Event, is covered under a group health plan:
  • an employee
  • a former employee
  • a retired employee
  • the dependent children of any of the above (including adopted and placed for adoption children)
  • the spouse of any of the above
  • children covered by the plan pursuant to Qualified Medical Child Support Orders
  • individuals who are covered by the plan who are self-employed persons, agents or independent contractors (and their employees, agents, and independent contractors), and corporate directors.
• Children born to, or placed for adoption with, the covered employee during the covered employee's COBRA coverage period, regardless of the date of the QE. (Note: This rule applies only to children born to, or placed for adoption with, covered employees, and not other QB's.), or
• In the event of a bankruptcy by the employer, a covered employee who has retired on or before the date of the substantial elimination of the group health benefits coverage is also a QB, as well as his/her spouse, surviving spouse, or dependent child if on the day before the bankruptcy QE, these individuals were beneficiaries under the group health plan.

Basic Rights

Each QB affected by a QE has separate COBRA election rights. A family of four covered individuals represents four separate potential QBs who each have independent COBRA rights. This means that a family could continue its family coverage at the family rate or elect separately and pay individual rates. This option allows for an ex-employee to accept coverage under a new employer's plan and still keep his or her family covered by the ex-employer's plan