Does COBRA Work Life My Exiting Health Plan?

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The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 provides for the temporary continuation of group healthcare coverage that would otherwise be lost due to certain qualifying events such as job loss or reduction of work hours. When you become eligible for COBRA continuation coverage, you will receive an election notice from your health plan outlining everything you need to know about your options, including how long your continuation coverage will last, how you pay, and how you elect coverage. One thing that may not be covered in the election notice is the coverage itself.

When you elect COBRA continuation coverage, the insurance plan you are given should be the exact same insurance plan given to “similarly situated active employees and their families.” What this means is that your temporary coverage should be the exact same coverage as your existing health plan.

Same Benefits, Same Limitations

While on COBRA coverage, you are also entitled to the same benefits, options and services that other employees enjoy under the plan. For example, you have the right to change coverage during open enrollment. Similarly, if you have a significant life event that would allow an employee to change their health insurance options, you will have those same choices. For example, if you have a child while under COBRA coverage, that child automatically becomes a beneficiary under the terms of the plan.

In addition to receiving all the same benefits, you are subject to the same rules and limitations such as deductibles, coverage limits, and co-pay. The same rules for filing claims, and for appealing any claim denials, also apply.

COBRA is not Conversion Coverage

COBRA continuation coverage is not the same thing as conversion coverage, in which employers offer participants the chance to convert their group plan to an individual plan after their group coverage ends. Individual plans are often more expensive than even COBRA coverage and offer fewer benefits. If your employer offers this option to other employees, however, they must also offer it to you once your COBRA continuation coverage period ends.

Your plan will provide you with all the details on what benefits and services are offered, as well as the plan limitations.

RedQuote Can Help

RedQuote administers COBRA for the employers we work with, and we help beneficiaries compare COBRA plan options with individual plan options so they can choose the best plan to meet their needs. If you or your company might be interested in hiring us to offer these options to beneficiaries leaving your group medical plan, contact us today!

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Published Aug 15, 2016.