Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1986. The law helps provide continuation of group health coverage that otherwise might be terminated. The key to this is that the employer must have a minimum of 20 employees.
How long you can continue your health benefits with COBRA depends on why you are eligible. Most people qualify of 18 months of extended coverage but it is possible to qualify for 36.
18 Month Qualifying Events:
- Voluntary termination
- Involuntary termination (Gross misconduct exception)
- Reduction of hours
36 Month Qualifying Events:
- Death of an employee (Spouse & Dependents can stay on plan)
- Employees medicare entitlement (Spouse & Dependents can stay on plan)
- Divorce
- Dependent child in no long a dependent
Coverage begins on the date that coverage would have been lost by reason of a qualifying event and will end at the end of the maximum period. It may end earlier if:
Premiums are not paid on a timely basis
The employer ceases to have a group health plan (this is happening More and more)
After the COBRA election, coverage is obtained with another employer group health plan.
After the COBRA election, a beneficiary becomes entitled to Medicare benefits.
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