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COBRA Insurance Frequently Asked Questions

Posted on: April 1st, 2011 by Cobra Insurance Guide No Comments

Although COBRA insurance is a great option to maintain health insurance coverage, for many it is a confusing and complex issue that raises many questions. Finding answers to these questions is incredibly important to make sure you make the right decisions for you and your family.

General:

What is COBRA insurance?

COBRA insurance was created in 1985, when Ronald Reagan’s administration passed a bill known as the Consolidated Omnibus Budget Reconciliation Act.  This act was created to protect employees and their families from suddenly losing health insurance if they lost or quit their jobs.  COBRA insurance allows individuals and families who meet the criteria of the law to elect to continue receiving their group health insurance and therefore not incur substantial medical bills or lapses in medical insurance coverage.

Should I sign up for COBRA insurance if I only need insurance for a month?

As long as your new insurance will kick in within the 60 day window you have to elect to sign up for COBRA insurance, there is no need to sign up for COBRA insurance.   The reason for this is that you elect to sign to sign up for COBRA insurance on the 60th day, your health insurance will be retroactive until the last day of your employment.   That means that if for any reason you got sick  or needed medical attention during the 60 days, you could then just pay the premium and be covered for those expenses.  If you don’t end up needing medical attention in those 60 days then you didn’t waste the money paying for  the two months of premiums.  Essentially, you would actually never be without coverage, since you can activate it at any time within the 6o days and cover the full term.

Your other option would be to sign up for a short term health insurance plan, which can be anyway from 1 day to 1 year, at a much cheaper rate than COBRA.  This would cover you for any major medical costs.

Can I still receive the COBRA insurance subsidy or COBRA insurance discount of 65% in 2011?

Unfortunately the COBRA insurance subsidy sponsored by the government to give people up to a 65%  discount on COBRA insurance premiums is no longer available.  It was passed as part of the stimulus package in 2009 and is longer available to new people signing up for COBRA medical insurance.

How many days do I have to elect COBRA insurance?

Under the current law, you have 60 days to decide if you want to elect COBRA insurance.  During that time it is important that you explore all of your options to make sure that is the right plan for you.  The exact date that you need to make an enrollment decision will be listed on your COBRA insurance election form.

How much do I have to pay to sign up for COBRA insurance?

This is completely dependent on the day that you decide to elect to enroll in COBRA insurance.  If you decide  to enroll in COBRA insurance right away, you will just be responsible f or the first premium.  However, if you wanted until the last day to enroll, you would have to pay 2 months of premiums.  This is because COBRA insurance is retroactive back to the date your insurance coverage would have stopped and you need to pay to cover that full period.  You can find out exactly what you need to pay by contacting your group health insurance plan.

Can I get COBRA insurance if I worked for a small company?

It depends on the size of your company and the number of employees covered under their insurance plan (either full time or their part time equivalents.  Federal COBRA insurance only applies to companies who cover at least 20 employees.  However, many states have created their own COBRA insurance laws to offer extended coverage to employees at companies with between 2-19 employees.  Learn more about state sponsored COBRA insurance.

Can I drop my COBRA insurance coverage at any time?

Of course!  COBRA insurance laws are meant to protect people and families  while they seek out other health insurance either through an independent company or by becoming employed elsewhere.  Therefore, you can drop your COBRA health insurance coverage at any time.  You need  to notify your group health insurance provider under COBRA when you would like the coverage to end.   Make sure  to check with your new employer or insurer for when the policy will become active.  In many companies, there is a 90 day waiting period until COBRA insurance kicks in.

Am I eligible for COBRA insurance if my company cancels their health insurance policy?

Unfortunately in most cases you will not be eligible for health insurance under COBRA insurance laws if your company stops providing health insurance.  The reason is  that COBRA insurance laws allow you to continue to receive your health insurance but if there is no health insurance to continue, then you are not able to keep insurance under COBRA.  This means you will likely need to start exploring alternative health insurance options.

I signed up for COBRA insurance but never paid the premium because it is too expensive, am I still covered?

Since you didn’t pay the premium, you are no longer covered under the COBRA insurance continuation law with your group health insurance policy.  However, if 30 days haven’t passed and now you want COBRA insurance, you can still pay the premium and keep your coverage.  If you need to explore additional health insurance options, you will want to learn about cobra health insurance alternatives.

Can I cover my children with COBRA insurance and not myself?

When you receive the COBRA insurance election form, you will have an option to choose who you want to be covered under the COBRA insurance continuation of your group health insurance plan.  This means that you can choose to cover only your children, only your spouse, only yourself, or any combination depending on your needs.

You may want to consider who needs to keep the current health insurance plan under COBRA insurance the most (i.e. someone with a preexisting condition or someone who needs consistent medical care) and cover other family members on a less expensive plan.

Can I still sign up for a COBRA benefit extension in 2011?

Unfortunately, the current stimulus package, which offered extended and discounted COBRA insurance premiums is no longer available.  That means that you can only sign up for COBRA insurance for the typical term length of 18 months.  The only other way you could qualify for extended your benefits is if you have a second qualifying event like the the death of the covered employee, if the covered employee  starts receiving Medicare benefits,  or if there is a legal separation or divorce.  This also would only extend to the spouse or any dependents, not the covered employee themselves.

My COBRA insurance premium payment was lost in the mail, what can I do so I do not lose coverage?

The very first thing you should do is reach out to the group health insurance provider you are receiving insurance from with COBRA.  Let them know what happened and many times, if this is the first time it has happened and there isn’t a pattern of missed payments they will work  with you.

Are there good COBRA insurance alternatives if I have a preexisting condition?

Likely, COBRA insurance will be your best option if you have a preexisting condition.  However it is always worth it to explore alternative options and explain your condition to find out if there is a cheaper option even though you have a preexisting condition.  Either way, it is incredibly important to keep some type of medical insurance.

Is there a cap to the amount COBRA insurance premiums cost?

Unfortunately under the current COBRA insurance laws, there is no cap to the cost of COBRA insurance premiums.  The premium is calculated based on the current cost of the group health insurance premium at your company plus the 2% administration fee.

Can I get COBRA insurance when my student insurance ends?

It depends on your university’s insurance plan and how many people are covered under  the plan.  There is a possibility that you can sign up to keep your health insurance from the university under COBRA insurance.  You should contact the health insurance provider/contact on campus to find out more information and/or call the insurance company themselves.

Can I sign up for COBRA insurance if I am self employed?

Unfortunately you will not be able to sign up for COBRA insurance if you are self employed.  Federal COBRA insurance benefits only extend to people who work for companies with over 20 employees and state sponsored COBRA insurance policies may extend to companies with 2-19 employees.  Most likely you will need to seek out COBRA insurance alternatives.  The only other option you could possibly explore is if you belong to a group health insurance plan provided by an umbrella network of self employed individuals.  If you are part of such a network, you may be eligible for COBRA insurance but you will have to reach out to your plan administrator.

Am I eligible for COBRA insurance if my company has under 20 employees?

Unfortunately you are not eligible for COBRA insurance under the federal law if your company has less than 20 employees.  However, many states have created extended COBRA insurance benefit laws that apply to people who work for companies with between 2-19 employees.  Learn more about COBRA continuation state policies.

Can I sign up for COBRA insurance if I quit my job?

Yes!  Under COBRA insurance you can sign up for COBRA insurance if you leave your job voluntarily (i.e. quitting) or involuntarily (i.e. being laid off).  You will need to complete the COBRA insurance enrollment form which should be provided by your employer.

Is there a COBRA application form I can download?

Unfortunately COBRA enrollment forms have to be provided by the employer and group health insurance provider.  The election forms, although they contain similar information, contain specific individual information about your plan, the premium, and who is covered so they have to be provided by the employer or group health insurance plan.  You should receive this from your employer, as it is their legal obligation to provide the COBRA insurance application, but if  your are concerned you should reach out to your employer and request the application.

Can I be denied COBRA insurance if I have a preexisting condition?

No.  As long as your were receiving health insurance in your previous job and meet all of the federal COBRA insurance requirements than you can no be denied COBRA insurance because of a preexisting condition.

Are my children covered under COBRA insurance laws?

If your children were covered under your previous health insurance policy and you qualify for COBRA insurance so you can continue to receive your group health insurance, then your children will be covered as well in almost all cases.  You can check by looking at your COBRA insurance election form or contacting your health insurance administrator.

Can I get COBRA insurance if I am not a U.S. citizen?

If your worked for a U.S. company that provides health insurance and you meet the federal requirement for COBRA insurance eligibility than you can be covered whether you are a U.S. citizen or not.  Make sure to get the COBRA insurance election form from your employer and submit it on time and you should be covered along with your dependents and/or spouse.

Are my COBRA insurance premium payments tax deductible?

It all depends on your health insurance plan and your current income and taxes.  Unfortunately there is no simple answer here.  The easiest way to find out if your health insurance premiums under COBRA is to contact your health insurance administrator or reach out to the IRS or a specialized tax agent.

Can my COBRA insurance premiums change?

Yes.  Since COBRA insurance is just a continuation of your group health insurance plan, any changes to that plan, including an increase or decrease in premium costs, will also affect your premium cost under COBRA insurance.   Your bill will reflect any changes in costs for the premium.  COBRA insurance premiums cannot be locked in at any point.

Can my health insurance plan change while covered under COBRA insurance?

It can.  Since COBRA insurance is a law that permits someone to continue to have their previous health insurance plan, any changes to that plan will also change your health insurance plan under COBRA insurance.  You should be notified of any of these changes and you can drop the policy at any time or seek our COBRA insurance alternatives.

Will COBRA insurance work outside of the United States?

That all depends on the type of health insurance plan that you had with your previous employer.  If the insurance company would have covered you if you moved out of the country, then they still will.  However, most insurance plans only work in a select area and will not work oversees, therefore meaning COBRA insurance will not work outside of the United States.  You can contact your health insurance provider to find out if you will be covered out of the country.

Can I cancel my COBRA insurance?

Of course!  COBRA insurance is meant to be an interim way to keep health insurance after you lose or quit your job.  Once you have found a new job with health insurance or decide to sign up for an alternative health insurance plan, you can cancel your COBRA insurance policy at any time by contacting your COBRA insurance administrator.

Does COBRA insurance cover dental insurance as well?

If your previous health insurance plan with your previous employer including dental insurance then in most cases you will be able to continue to receive dental insurance with COBRA.  When you receive your COBRA insurance election form, you will have to list what type of insurance you wish to continue with COBRA and who you want to be covered.  If you wish to continue to have your dental insurance, make sure to mark this on the form.  You will have to then pay the dental insurance premium along with the health insurance premium.

Can my employer deny COBRA insurance benefits?

If you qualify for COBRA insurance under the federal eligibility requirements and have not left your job due to gross misconduct, then your employer can not deny you COBRA insurance benefits.  If you think you are unfairly being denied COBRA insurance benefits by your employer you should reach out to the Department of Labor.

Can I continue COBRA insurance just for my spouse?

Yes.  When you receive your COBRA insurance  enrollment form, you will be able to choose you would like  to sign up for COBRA insurance coverage.  This means that you can pick and choose who will continue to be covered under the health insurance policy with COBRA.  You can choose to just cover your spouse and find alternative insurance for yourself.

Can I change my COBRA insurance plan for a private medical insurance plan?

Under the COBRA insurance law, you can drop COBRA insurance at any time as long as you inform your insurance provider.  This means that you can at any time convert to a private health insurance plan.  Just be careful that when you drop COBRA insurance your other plan has started so you don’t experience a lapse in coverage.

Where can I find a list of doctors for COBRA insurance?

Since COBRA insurance is actually legislation that allows you to choose  to continue receiving your previous group health insurance plan, there will not be a list of doctors that take COBRA insurance, but instead the same doctors that were covered under your previous health insurance plan will still be covered.  If you need a list of those doctors, you should contact your health insurance plan administrator.

Can I keep COBRA insurance even if my new job offers health insurance?

Sometimes people may find a new job but still would like to stay on their previous plan with their former employer under COBRA because they prefer that plan.  This is completely possible under COBRA insurance laws as long as you do not sign up for the new insurance.  However,  when your COBRA insurance benefits run out, you will likely want to sign up for your new employers health insurance plan or find a private plan.

I just had a baby, can I add him/her to my COBRA insurance plan?

It all depends on the health insurance policy that you chose to continue under the COBRA insurance law.  Each group health insurance company has different policies so you will want to call your insurance provider.  Under most policies you will be allowed to add your baby once you give birth.

Can I sign up for COBRA Insurance if I retire?

Yes – under the COBRA insurance law, retiring from your job is considered a qualifying event which means you can elect to continue to keep your group health insurance plan with COBRA insurance.  Make sure to get the COBRA enrollment form from your employer, complete it on time, and submit it on time with the premium that is due.

Is there a grace period before they cancel COBRA insurance if I can’t pay?

With most health insurance plans, there is a 30 day grace period, within which you need to pay your COBRA health insurance premium.  If you fail to pay the premium within this window it is likely that your COBRA insurance will be cancelled and you will not be able to sign back up.

Can I keep my HSA or flexible spending account with COBRA insurance?

COBRA insurance laws provide that you can continue to maintain your current health insurance plan if you leave or quit our job and meet the COBRA insurance requirements.  This means that you can keep all benefits of the previous plan, including HSA and flexible spending accounts under COBRA insurance laws.  If you have specific questions about what this looks like you should contact your group health insurance provider.

How do I add a dependent to my COBRA insurance?

Since COBRA insurance is just a law that enables you to continue to have access to your previous group health insurance, you would take the same steps to add a dependent.  First contact your health insurance provider (not COBRA which is just the law that allows this) and find out their policy for adding a dependent.

Can I keep the same health insurance plan with COBRA insurance?

That is exactly what COBRA insurance is for.  COBRA insurance actually refers to the law that was passed in 1985 and not to a specific type of insurance.  The law allows you to keep your current health insurance plan as long as you meet federal requirements which means that yes, you can and will keep the exact same health insurance plan.

Can I sign up for COBRA insurance after the 60 day window?

Unfortunately you can not sign up for COBRA insurance after the 60 day enrollment window has ended.  If that window has passed  you will need to look for alternative insurance through a private company so that you can have health insurance.

Can I use COBRA insurance more than once?

COBRA insurance laws apply each and every time you leave a job and meet the COBRA insurance eligibility requirements.   That means that you can be eligible for COBRA insurance multiple times in your life as long as you meet the federal or state requirements.

Will I need new health insurance cards with COBRA insurance?

Because COBRA insurance is just the law that allows you to keep your health insurance previously provided by your employer, given you meet the requirements, you will not need to get a new health insurance card in most cases.  Your health insurance will not change when you sign up for COBRA insurance and therefore you will in most circumstances not need a new health insurance card.

Who is eligible for COBRA insurance in my family?

If you are a covered employee under the COBRA insurance law, then generally anyone who was previously covered in your health plan will continued to be covered if you elect COBRA medical insurance.  These generally includes your spouse, children, and any other dependents.

Is it hard to find a new doctor if I sign up for COBRA insurance?

Since COBRA insurance is just the law that allows you to continue to maintain your group health insurance plan, finding a doctor will be the exact same as it was on the plan you had while you were working.  Remember COBRA just allows you to keep that plan.  This means that you can keep all the same doctors and finding a new doctor falls under the same restrictions as it did while you were employed.

How much does COBRA insurance cost?

If you elect to sign up for COBRA health insurance coverage, you will be responsible for 100% of the premium for  your insurance (including your contribution and any contribution your former employer made) plus a 2% administration fee.  You can locate this information on a recent pay stub, by contacting your employer, or by looking on the COBRA insurance notification form that lists the premium due.

Does COBRA insurance qualify as creditable coverage?

Yes – electing to continue your health insurance coverage with COBRA insurance, will qualify as creditable coverage (under the HIPAA) law.  Creditable coverage helps ensure that you are not excluded from a health insurance policy in the future due to a preexisting condition.

Where do I send my monthly COBRA insurance premiums?

Since COBRA insurance is the law that allows you to maintain your health insurance not the actual insurance, you will send the monthly premiums to your group health insurance company.  This is the same one that you had when you were employed.  Normally the address is located on your COBRA election form and if you can no find that, you can call your former employer or the health insurance provider.

I just qualified for Medicare, can my family still receive COBRA insurance?

Yes – if you were the one who was providing the COBRA insurance policy (i.e. COBRA kicked in because you no longer were covered due to job loss/quitting and elected to continue to keep your group health insurance with COBRA).  Under the COBRA insurance laws, this is known as a secondary qualifying event which will allow your family to be covered for an additional 7 months.

Where do I get the COBRA insurance application/enrollment form?

The application for COBRA insurance, also know as the enrollment of election form, should be provided by your employer within 45 days of your last day of work.  You can not use a generic form found online to elect COBRA medical insurance so you must reach out to your employer or health insurance company for the form.  If 45 days have passed and you are sure you qualify for COBRA insurance, reach out to the Department of Labor at 866-444-3272.

Does COBRA insurance work in every state or only certain ones?

COBRA Insurance is a federal law, passed in 1985, which means that is works in every single state.   Each and every state is required to offer continuation of health insurance with COBRA insurance as long as the employee meets the eligibility written in the law.  If you do not meet the federal COBRA eligibility requirements, some states offer additional COBRA insurance plans for people at smaller companies normally known as mini-COBRA  or COBRA continuation plans.

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