COBRA (7 QUESTIONS) Flashcards
How many employees must an employer have in order to have COBRA
20
What does COBRA stand for
Consolidated Omnibus Budget Reconciliation Act (COBRA)
When does COBRA apply to private sector employers?
COBRA generally applies to private sector employers with at least 20 employees
Does COBRA apply to public sector employers?
COBRA generally applies to private sector employers with at least 20 employees or by state AND local governments, but does NOT apply to plans sponsored by Federal Government or by churches and church related organizations
Is it possible to have COBRA if you have less than 20 employees?
If you have less than 20 employees, its possible there may be a state law similar to COBRA and often called mini-COBRA.
Can a part time employee be considered for COBRA?
Part time employees and full time employees are considered (part time employees are counted using a fraction with number of hours employee worked part-time and number of hours for employee to be considered full time).
What are the requirements for COBRA continuation coverage
(1) employee’s group health plan must be covered by COBRA (i.e. employer had 20 or more employees);
(2) a qualifying event must occur (i.e. you were laid off, quit your job, or retired, or your hours were reduced or terminated but not because of gross misconduct);
(3) employee was a participant in your employer’s group health plan;
(4) employer continues to maintain a health plan; and
(5) you must be a qualified beneficiary.
WHO is a qualified beneficiary?
Allows employees and their families (spouse, former spouse and their dependent children) under group health coverage to continue coverage under the group health plan, usually at their own expense, for a limited period of time.
May also include an employer’s agents, independent contractors and directors who participate in group health plan, as well as child born to or adopted during a period of continuation coverage.
In cases involving bankruptcy of an employer sponsoring the plan, it may include a retired employee, that retired employee’s spouse (or former spouse) and dependent children.
What is a qualifying event for spouse or dependent child?
(1) Death of covered employee, termination or reduction in hours for reasons other than gross misconduct, quit your job, retired, laid off, divorce or legal separation of covered employee, a covered employee becoming entitled to Medicare, and a child’s loss of dependent status under the plan.
(2) Dependent Child is the adult child reaches the age of 26 (under the Affordable Care Act, must make plans available for a dependent child until age 26 under a parent’s policy). The employer must notify the plan within 30 days of a qualifying event if the qualifying event is: death of covered employee, termination or reduction in hours for reasons other than gross misconduct, a covered employee becoming entitled to Medicare, or bankruptcy of a private sector employer.
(3) You (the employee or qualified beneficiary) must notify the plan if the qualifying event is: divorce, legal separation, or a child’s loss of dependent status
What is a qualifying event for an employee?
Termination or reduction in hours for reasons other than gross misconduct
What is COBRA election notice?
COBRA election notice must be given by the plan to the qualified beneficiary within 14 days after the plan administrator receives notice of the qualifying event.
If the group health plan denies a request for continuation of coverage or an extension of coverage, the notice must be provided within 14 days after the request is received and explain the reason for denying the request.
What the time for electing continuation coverage?
The plan can set a time limit for providing this notice of electing continuation coverage but it cannot be shorter than 60 days from the later of:
(1) the date the qualifying event occurs;
(2) the date on which you lose or would lose coverage under the plan as a result of the qualifying event, or
(3) the date on which are informed of the responsibility to notify the plan and the procedures for doing so.
What happens if you waive the time for electing continuation coverage?
If you waive it, you may revoke the waiver so long as during the election period and coverage begins the date you revoke the waiver
What happens with the costs of continuation coverage?
Employers may require individuals who elect continuation coverage to pay the full cost plus a 2% administrative charge
What is the duration of coverage if the qualifying event is the employees termination or reducing in hours?
Qualified beneficiaries are entitled to 18 months of continuation coverage
What happens to duration of coverage if the employee became entitled to Medicare less than 18 months before this qualifying event?
COBRA coverage for the employee’s spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare (i.e. if employee becomes entitled to Medicare 8 months before termination and that is the qualifying event, COBRA coverage for spouse and children would be 28 months as 36-8=28).
What is a situation when 18 month coverage can be extended?
Coverage may be extended beyond 18 months if a qualified beneficiary (employee or family member) is disabled (all qualified beneficiaries benefit from extension and it is for an 11 month extension for a total of 29 months) or if there is a second qualifying event (i.e. a divorce, becoming entitled to Medicare, death of employee, dependent child becoming 26, with the extension giving a total maximum period of 36 months of continuation coverage).
