• The last day of maximum coverage
has arrived.
• Defaulted on your payments.
• The employer stops to maintain any group health
plan.
• The employer faces closure of business or bankruptcy.
• If you receive coverage via another employer group
health plan that does not contain any exclusion or limitation
with respect to pre-existing conditions of a beneficiary.
However this does not include eligibility under a spouse's
group health plan.
• You become eligible for Medicare benefits.
What process must individuals follow
to elect COBRA continuation coverage?
Within 30 days of a qualifying event such as an employee's
death, termination, reduced hours of employment or entitlement
to Medicare, the employer must notify the plan administrator.
Within 60 days of a qualifying event such as divorce or legal
separation or a child's ceasing to be covered as a dependent
under plan rules, a qualified beneficiary must notify the
plan administrator.
Within 14 days of notification the plan administrator will
alert you and your family members, in person or via first-class
mail about your right to elect COBRA. After such alert to
you, your spouse and children have 60 days to make an election
for COBRA. This election period is accounted for, from the
date your eligibility notification is sent to you or the date
that you lost your health coverage, whichever is later. You
will receive retroactive COBRA coverage from date that you
lost your benefits as long as you pay the premium.
Who pays for COBRA coverage?
The qualified recipients will possibly be required to reimburse
for COBRA coverage. The premium charged cannot exceed 102
percent of the cost of a similar plan. Here the calculations
are inclusive of payments made both by employees and the employer,
plus 2 percent for administrative costs.
You may qualify to receive an 11 month disability extension
of coverage. You may be required to pay an additional 150%
of the plan's total cost of coverage as premium.
The premium costs are fixed in advance for each 12-month premium
cycle. That said, COBRA premiums may be increased if the cost
of the plan increases. You are permitted to either pay
weekly, quarterly or monthly.
All payments are retroactive from the loss of coverage date. The
first payment should be made within 45 days after the date
of the COBRA election. Remember the plan is not obligated
to send monthly premium notices. You may get a minimum 30-day
grace period for payments. The plan holds the right to
cancel your coverage if the premiums are not received. You
can reinstate your coverage retroactively to the beginning
of coverage period by making all the required payments.
Incase you do make a short payment in error and if it is not
significantly less, then the plan is required to notify you
of the deficiency and grant a reasonable period, usually 30
days, to pay the difference.
Although you qualify for COBRA, you still are required to
satisfy all costs related to co-payments and deductibles,
and are subject to catastrophic and other benefit limits just
like any other plan.
Source - http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html
