Benefits Continuation (COBRA) Guidance Template
Benefits Continuation Guide (COBRA)
Introduction
This guide explains your rights to continue group health benefits after your employment ends or you experience another qualifying event. The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides eligible employees and their dependents the opportunity to temporarily continue health coverage when it would otherwise end due to certain qualifying events.
COBRA Overview
What is COBRA?
COBRA is a federal law that requires employers with 20 or more employees to offer continued health insurance coverage to qualified beneficiaries who would otherwise lose their benefits due to certain qualifying events.
Who is Eligible?
COBRA coverage is available to "qualified beneficiaries" who experience a "qualifying event" that would result in the loss of group health coverage.
Qualified Beneficiaries include:
Employee
Employee's spouse
Employee's dependent children
In some cases, retired employees and their dependents
Qualifying Events for employees include:
Voluntary or involuntary termination of employment (except for gross misconduct)
Reduction in hours worked
Qualifying Events for spouses include:
Termination or reduction in hours of the covered employee
Death of the covered employee
Divorce or legal separation from the covered employee
Covered employee becoming entitled to Medicare
Qualifying Events for dependent children include:
Termination or reduction in hours of the covered employee
Death of the covered employee
Parents' divorce or legal separation
Child losing dependent status under the plan rules
Coverage Period
The duration of COBRA coverage depends on the qualifying event:
18 months: Employment termination or reduction in hours
29 months: If qualified beneficiary is disabled (as determined by Social Security)
36 months: For other qualifying events (death, divorce, etc.)
Your COBRA Rights and Responsibilities
Election Period
You have 60 days from the later of:
The date coverage would terminate due to the qualifying event, or
The date you receive the COBRA election notice
to elect COBRA coverage. Each qualified beneficiary has an independent right to elect COBRA.
Premium Payment
You are responsible for paying the full premium plus an administrative fee (up to 102% of the cost of coverage)
Initial premium payment is due 45 days after election
Subsequent payments are typically due on the first day of each month with a 30-day grace period
Coverage Details
COBRA continuation coverage must be identical to the coverage currently available to similarly situated active employees and their families.
Alternatives to COBRA
Health Insurance Marketplace
You may be eligible to purchase health insurance through the Health Insurance Marketplace. Marketplace coverage might cost less than COBRA continuation coverage, and you may qualify for tax credits that reduce monthly premiums.
Website: www.healthcare.gov Phone: 1-800-318-2596
Medicaid
Depending on your income and family size, you might qualify for Medicaid.
Spouse's Plan
If your spouse is employed, you may be able to join their employer's health plan.
How to Enroll in COBRA
Complete the COBRA Election Form provided with your COBRA notification letter
Return the form to [COBRA Administrator] within 60 days of notification
Make your first premium payment within 45 days of your COBRA election
Termination of COBRA Coverage
COBRA coverage may terminate before the end of the maximum coverage period if:
Premiums are not paid on time
The employer ceases to maintain any group health plan
A qualified beneficiary begins coverage under another group health plan
A qualified beneficiary becomes entitled to Medicare
A qualified beneficiary engages in conduct that would justify terminating coverage of an active employee
Important Contacts
COBRA Administrator: [Administrator Name] [Phone Number] [Email] [Address]
Human Resources: [HR Contact Name] [Phone Number] [Email]
Health Insurance Provider: [Provider Name] [Phone Number] [Website]
Frequently Asked Questions
Q: Can I change my coverage options when electing COBRA? A: Generally, you must elect the same coverage you had prior to the qualifying event. However, during open enrollment periods, you may change plans like active employees.
Q: What happens if I miss a COBRA payment? A: If you don't make payments within the grace period, your coverage may be terminated and cannot be reinstated.
Q: Can my COBRA coverage be extended? A: In some cases, a second qualifying event during the initial COBRA period may extend coverage to 36 months.
Q: Do I need to show proof of insurability to elect COBRA? A: No, proof of insurability is not required.
Note: This document provides general information about COBRA continuation coverage and is not intended as legal advice. For specific information about your rights and obligations, please consult your COBRA election notice or contact the plan administrator.
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