If You Lose Your Benefits – Basic Information on COBRA Provisions

Losing your job is, of course, difficult and losing your insurance benefits along with it is even more difficult especially if your have individual health needs or a family to care for. Federal Law provides the ability to retain your insurance coverage for an extended period of time if one of the following qualifying events occurs:

18-Month Continuation

  • End of employment (other than gross misconduct)

36-Month Continuation

  • Entitlement to Medicare
  • Death of an employee (who declared you as a dependent)
  • Divorce or legal separation (from an employee who declared you as a dependent)
  • Reduction in hours of employment (making you ineligible for full-time benefits)
  • Loss of dependent-child status (such as reaching the age limit or graduating college)

The provision is called C.O.B.R.A. and stands for the Consolidated Omnibus Budget Reconciliation Act. In New York State, Federal law requires employers who voluntarily provide group health insurance benefits, to also offer temporarily-extended health insurance benefits to employees or their dependants in the event a qualifying event occurs. The companies Human Resource Director or Plan Administrator must advise you of your COBRA benefits. Notification must be within a specific period of time from the date the event occurs. The employee is then provided a period of time to elect the COBRA benefits that can continue your coverage for 18-36 months (see above). Normally you will have to accept the employers current plan type/design unless offered the choice to select another plan. A COBRA plan can cost up to 102% of the applicable premium.

A recent economic stimulus act, the American Recovery and Reinvestment Act of 2009, provides involuntarily terminated individuals with the ability to potentially qualify for a 65% subsidy payment to assist with your monthly health insurance premiums (for a period of up to 9 months). In New York State, employer groups with 20 or more employees would initially pay the entire cost of your COBRA premium. The subscriber (employee) would be billed for 35% of the cost while the employer would ultimately deduct 65% from their annual Federal Income Tax filing. Employers with less than 20 employees would bill the subscriber (employee) for 35% of the monthly premiums while the insurance carrier would make up the remaining 65% difference by reducing their annual Federal Income Tax filings accordingly. Please note that at the time this information was written the stimulus act is retroactively applicable to those terminated between September 1, 2008 and February 17, 2009 and available to individuals terminated up until December 31, 2009.

As an employee or dependent finding themselves in this position, you may also seek alternative coverage you can obtain on your own. There may be several solutions available to you, but for those offered by CAI (Conference Associates, Inc.) in New York State please click here for Limited Medical or click here for Hospital Only.

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    All health plan, insurance coverage information, or otherwise is subject to carrier approval and/or NYSID approval. For complete coverage information, always refer to the certificate of insurance. Neither Conference Associates, Inc. (CAI)/ELITE Programs Inc. (ELITE), nor its web administrators may be held liable for typographical errors.