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Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific qualifying events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

Qualified beneficiaries generally are eligible for group coverage during a maximum of 18 months. However, certain qualifying events or a second qualifying event during the initial period of coverage may permit a beneficiary to receive a maximum of 36 months of coverage.

Coverage begins on the date that coverage would otherwise have been lost by reason of a qualifying event and will end at the end of the maximum period. It may end earlier if:

After the COBRA election, coverage is obtained with another employer group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of such beneficiary. However, if other group health coverage is obtained prior to the COBRA election, COBRA coverage may not be discontinued, even if the other coverage continues after the COBRA election; or

After the COBRA election, a beneficiary becomes entitled to Medicare benefits. However, if Medicare is obtained prior to COBRA election, COBRA coverage may not be discontinued, even if the other coverage continues after the COBRA election.

Yes. Disability can extend the 18-month period of continuation coverage for a qualifying event that is a termination of employment or reduction of hours. To qualify for additional months of COBRA continuation coverage, the qualified beneficiary must:

Have a ruling from the Social Security Administration that he or she became disabled prior to or within the first 60 days of COBRA continuation coverage

Send the plan a copy of the Social Security ruling letter within 60 days of receipt, but prior to expiration of the 18-month period of coverage

If these requirements are met, the entire family qualifies for an additional 11 months of COBRA continuation coverage. Plans can charge 150% of the premium cost for the extended period of coverage.

In California, there are additional extensions in certain situations under CAL-COBRA (California Continuation Benefits Replacement Act).

An employer has 30 days from the former employee’s last day of coverage to notify Benefit Coordinators Corporation that a qualifying event has occurred. At that time a COBRA election notice will be mailed to the qualified beneficiary within 14 days.

Qualified beneficiaries have 60 days to decide whether to elect COBRA continuation coverage. This period is measured from the later of the coverage loss date or the date the COBRA election notice is provided.

If the former employee does not elect coverage, however, the former employee’s spouse/dependent elects coverage, then the dependent’s information (name, social security, etc.) is entered into the system and the dependent’s information should be used when receiving services, i.e. filling prescriptions, doctor’s visits, etc.

A participant may cancel his/her COBRA coverage at any time, unless otherwise specified by the group plan. The participant should provide Benefit Coordinators Corporation with a signed letter that indicates the date of cancellation. If the participant does not make his/her payment, then coverage will be cancelled due to non-payment.

All checks are mailed to the bank. Therefore, Benefit Coordinators Corporation must wait for notification from the bank that the check has been received before the appropriate carriers can be notified that the participant has coverage. This process can take up to 7 to 10 business days.

The participant can contact the appropriate carrier to verify that his/her information has been updated.

To complete the election form, the participant needs to refer to the rate sheet that accompanies the election form to confirm plans available and applicable rates.

Benefit Coordinators Corporation
Attn: COBRA Administration
100 Ryan Court, Suite 200
Pittsburgh, PA 15205-1324

Invoices are processed monthly between the 15th and 20th of the month for the following month’s coverage. A participant may not receive an invoice if the participant’s group is in the process of rate renewals. They also will not receive an invoice until they have made their initial payment when electing COBRA.

The participant can either submit payment based on the old rate without an invoice, or the participant can wait until he/she receives a rate change letter and new invoice. If the participant pays at the old rate, any adjustments will appear on their next invoice as a balance due.

Yes, the participant cannot have a lapse in coverage.

The participant has 45 days from the date he/she signed the election form to submit the initial payment. However, the participant’s information will not be submitted to the appropriate carriers until the initial payment is received, and the longer a participant waits to make the initial payment the more he/she will owe.

After the initial payment, payments are due by the 1st of the coverage month. However, if the envelope is post-marked by the last day of the coverage month, the check will be accepted and coverage will continue through the end of the month for which full payment has been received.

PLEASE NOTE: Exception for certain Maryland groups – please call BCC
If a participant’s coverage is with a group that is located in Maryland, then the participant may be invoiced a month in advance and the payment must be received no later than the 20th of the month prior to the coverage month. We are unable to administer according to the postmark date. If you live in Maryland, please contact BCC to see if this applies to you.

A Qualified Beneficiary, who can be either the employee or dependent and who is covered at the time of the event, can make the election to continue coverage when a qualifying event occurs.

A Qualified Beneficiary would also be a dependent child born to or adopted by one of the original Qualified Beneficiaries during the COBRA continuation.

An insured person’s new spouse, stepchild or foster child acquired during the continuation period is not considered a Qualified Beneficiary.

If the covered employee’s eligibility ends due to a qualifying event and he or she becomes entitled to Medicare after electing COBRA continuation coverage, then coverage may not be continued for the covered employee but coverage may be continued for any covered dependents for up to:

•

36 months from the date of the original qualifying event if Medicare Entitlement is considered a qualifying event under the group Plan. This varies by client.

If the covered employee’s eligibility under the policy continues beyond Medicare entitlement, but later ends due to a qualifying event, any covered dependents may continue coverage for up to:

•		36 months from the covered employee’s Medicare entitlement date, or
•		18 months from the date of the first qualifying event (whichever is later)

Coverage may not be continued beyond 36 months from the date of the first qualifying event.

According to COBRA legislation, the same rights that are provided to active employees must be provided to members on COBRA. There are two exceptions to this:

•		The same late entrant limitations apply to “later added” dependents if they are added outside the 31-day eligibility period.
•		A dependent added after the COBRA coverage had begun does not have the right to continue coverage on their own if they lose those benefits under the member.

Any other dependents acquired during the COBRA continuation can be added as dependents, but they do not have their own “COBRA rights.” They are not qualified beneficiaries.

If an “employee-qualified beneficiary” marries during the continuation period and adds his spouse to his COBRA coverage, then divorces during the continuation period, that spouse does not have any additional continuation rights.