COBRA (The Consolidated Omnibus Budget
Reconciliation Act of 1985) is a law that requires employers
with 20 or more employees to let employees and their dependents keep their group health
coverage for a time after they leave their group health plan under certain conditions.
This is called “continuation coverage.” You may have this right if you lose your
job or have your working hours reduced, or if you are covered under your spouse's
plan and your spouse dies or you
get divorced. COBRA generally lets you and your dependents keep the group coverage for 18
months (or up to 29 or 36 months in some cases), but you may have to pay both your share
and the employer's share of the premium.
Some state's laws require employers with less
than 20 employees to let you keep your group health coverage for a time, but you should
check with your State Insurance Department to make sure. In most situations that give you
COBRA rights, other than a divorce, you should get a notice from your benefit
administrator. If you don't get a notice, or if you get divorced, you should call your
benefit administrator as soon as possible.
If you already have
continuation coverage under COBRA when you enroll in Medicare, your COBRA may end. This is
because the employer has the option of canceling the continuation coverage at this time. The length of time your spouse may get coverage
under COBRA may change when you enroll in Medicare. For more information about group
health coverage under COBRA, call your State Insurance Department.
However, if you elect
COBRA coverage after you enroll in Medicare, you can keep your continuation coverage. When
your group health coverage ends, you and your dependents can get coverage under COBRA. If
you only have Medicare Part A when your group health plan coverage ends (based on current
or active employment), you can enroll in Medicare Part B during a special enrollment
period without having to pay a Part B premium penalty. You need to enroll in Part B either
at the same time you enroll in Part A or during a special enrollment period after your
group health plan coverage, based on current or active
employment, ends.
Remember, this will also
start your Medigap open enrollment period. However, if you only have Medicare
Part A, sign-up for COBRA coverage and wait until the COBRA coverage ends to enroll in
Medicare Part B, you will have to pay a Part B premium penalty. You do not get a Part B special enrollment period
when COBRA coverage ends. State law may give you the right to continue your coverage under
COBRA beyond the point COBRA coverage would ordinarily end. Your rights will depend on
what is allowed under the state law.
*This
information was taken from the Health Care Financing Administration’s, “2000 Guide to Health Insurance for
People with Medicare”.
The
Department of Labor has
additional
information on COBRA.
