You can continue to have the benefits of your health coverage plan after leaving your job.

What is it?

The Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) requires companies to provide covered employees and/or the spouse and dependents, which qualify as beneficiaries under COBRA, the opportunity to keep their health coverage benefits.

This is possible for a temporary period of time, under the same medical benefits program, and subject to the group’s premium rates, and is provided under certain circumstances in which otherwise the employee’s coverage would have been terminated.

COBRA only applies to groups of 20 or more employees.

Qualified Beneficiaries

As a qualified beneficiary, and as an employee, you can choose to continue with your medical, prescribed medications, dental, and vision coverage benefits, as well as with the health care flexible expenses account and PAE coverage in effect at the time in which otherwise your coverage would have been terminated.

The employee, under certain circumstances, can also be eligible to continue with its participation in the health care flexible expenses account.

Qualified beneficiaries include the employee, the employee’s spouse, and the dependent children covered under the medical benefits program valid immediately prior to the coverage termination.

A covered beneficiary also includes a child born or adopted by the employee while the employee is subscribed in the COBRA continuation coverage benefit, as long as the employee notifies the Claims Administrator within a 30-day period following the event.

The employee does not have to show evidence that he or she is an insurable person to choose the continued coverage benefit. However, the continued coverage benefit under COBRA is provided subject to the employee’s eligibility for the coverage benefit.

The company, or employer, has the right to terminate the employee’s coverage benefit retroactively if it is determined that the employee is ineligible under the terms of the medical benefits program.

You have 60 days to choose whether you want to continue under the benefits plan.

The employee will have 60 days from the date of the qualifying event to choose the continued coverage under COBRA. If the employee does not choose the COBRA coverage within that period of time, he (she) will not be eligible for coverage under COBRA.

The employee will have to pay the full premium, plus a 2% administrative expenses fee, for the continued coverage. There is a grace period of at least 30 days for the scheduled regular premium payment . A 45-day grace period applies for the first payment of the employee’s premium.

The continuation of the COBRA benefit for the medical benefits program is administered by the Human Resources Department or a company hired as a COBRA Administrator.

Who is covered?

Employees

If the employee has a medical, dental, prescribed medications, and vision coverage or PAE benefits sponsored by the company, he (she) has the right to choose his (her) continued coverage if he (she) looses his (her) employee’s health group coverage due a reduction of the working weekly schedule or employment termination (for reasons that does not include flagrant inappropriate behavior on behalf of the employee).

If the employee leaves the company after being away on a leave of absence that qualifies under the Family and Medical Leave Act, the event that will give way to the continued coverage will be the earlier date between the date in which the employee notifies his (her) decision to not return to work after the leave of absence or the last day of the FMLA license period.

Spouses

If the individual is the spouse of an employee and he (she) is covered by a medical benefits program sponsored by the company the day before the qualifying event, the individual is a qualified beneficiary and has the right to choose a continued coverage if he (she) looses the group coverage under a group’s health plan sponsored by the company for any of the following reasons:

Death of spouse
The spouse looses his (her) job (for reasons other than flagrant inappropriate conduct)
Spouse’s work schedule reduction
Divorce or legal separation from spouse
The spouse is eligible for Medicare.

Children or Dependents

If the individual is a covered dependant child of an employee covered by a medical benefits program provided by the company the day before the qualifying event, the individual is a qualified beneficiary and is entitle to choose the continued coverage if he/she looses the group coverage under such program for any of the following reasons:

Death of the employee
The employee loses his (her) job (for reasons other than flagrant inappropriate conduct) or his (her) work schedule is reduced
The employee is eligible to Medicare
Divorce or legal separation from the employee
The dependent is no longer a “dependent child” under the program provided by the company

If the insured employee chooses the continued coverage and has a new child (through natural birth or adoption, or placement for adoption) during the continued coverage period, the new child will also be eligible to become a qualifying dependant.

According to the group health plan provided by the employer and the requirements of federal laws, these qualified beneficiaries can be added to the COBRA coverage by providing a birth, adoption or placement for adoption notification of the new child to the COBRA Administrator. This notification must be included in the COBRA form designed for such purpose and should include any additional information or documentation that must be submitted with the form.

If the covered employee does not notify the company in due time (according to the terms of the group health plan provided by the company), he (she) will not have the option to choose the COBRA coverage for the new child.

Recently acquired dependants (that are not the born, adopted or place for adoption children of the employee) will not be considered qualified beneficiaries, but can be added to the employee’s continued coverage.

Separate elections

Each qualified beneficiary is entitle to an independent choice for COBRA coverage. For example, if able to choose among different types of health coverage, each qualified beneficiary eligible for the continued coverage is entitle to make a separate choice between the different types of health coverage.

Therefore, a dependant spouse or a child is entitle to choose a continued coverage even if the covered employee does not make such a choice. Likewise, a dependant spouse or child can choose a coverage different to the one chosen by the employee.