COBRA (Consolidated Omnibus Budget Reconcilliation Act of 1986)
• Group health plans with 20 or more employees are required to offer continuation of group health insurance coverage for individuals and their dependents.
• Employees qualify for COBRA due to voluntary or involuntary termination or reduction in the number of hours worked. COBRA coverage is available for 18 months after an individual leaves employment or up to 36 months in some circumstances.
• If you become disabled within 60 days of starting COBRA and apply for Social Security Disability Insurance (SSDI), you need to inform your COBRA Plan Administrator within 60 days of being notified of SSDI eligibility. In that event, COBRA can be extended for an additional 11 months. This expansion of COBRA to a total of 29 months will allow you to have continuous coverage until you become eligible for Medicare, which begins 24 months after you become eligible for Social Security Disability.
• Group health coverage for COBRA participants is usually more expensive than health coverage for active employees. This is because the employer typically pays for part of the health insurance premium for active employees. COBRA participants must pay the full health insurance premium.
• Although COBRA coverage can be costly, it can be less expensive than individual health coverage.
• Under the American Recovery and Reinvestment Act of 2009, a 65% reduction in COBRA premiums is available to certain assistance eligible individuals for up to nine months.
HIPAA (Health Insurance Portability and Accountability Act of 1996)
• Limits exclusions for pre-existing medical conditions in group health plans to a maximum of 12 months (18 months for late enrollees).
• A pre-existing medical condition is one in which medical advice, diagnosis, care or treatment was recommended or received during the 6 month period prior to an individualÕs enrollment date.
• HIPAA limits exclusions for pre-existing medical conditions if you have had continuous coverage without a break in insurance coverage for 63 days or more.
• Individuals with a history of prior health care coverage (63 days or less) will be able to reduce the exclusion period by using creditable coverage. Creditable coverage can be used to offset a pre-existing condition exclusion period.
• Creditable coverage includes participation in a group health plan, COBRA continuation coverage, Medicare, Medicaid and coverage through an individual health insurance policy.
• Also prohibits employers who offer group plans from denying or dropping coverage based on an employeeÕs medical status.
• Prohibits discrimination in enrollment and in charged premiums charged to employees and their dependents based on health status-related factors.
Employment Benefits Security Administration (EBSA)United States Department of Labor