Guide to Continuation of Your Group Health Coverage & Other Benefits

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When you lose your employment, continuation of your group health benefits becomes very important to you and your family. It is something most of us cannot afford not to have. It is important for you to understand what benefits you are losing, which benefits your company has to legally offer for continuation under COBRA, what you need to do, and deadlines for you to take action.

Below is some information you need to know.

Congress passed in 1986 the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions to provide continuation of group health coverage that you would lose as a result of your separation from your employer.

It provides certain former employees, retirees, spouses, former spouses and dependent children the right to temporarily continue health coverage at group rate due to specific events, i.e., reduction in force, voluntary termination, divorce or legal separation or death of the covered employee.

Before you decide to take COBRA through your former employer, it pays to shop around to compare cost for individual or family health coverage. Just be aware that companies selling individual health plan normally will require medical review and may not cover pre-existing conditions or you may be able to get coverage but end up paying a higher premium.

COBRA will offer identical coverage provided to other eligible beneficiaries who are not under COBRA coverage; typically you are offered the same coverage that you have immediately before you qualified for continuation coverage. COBRA coverage generally maybe continued for 18 months; maybe continued for up to a total of 36 months from the initial qualifying event if a second qualifying event occurs during the first 18 months of continuation coverage.

It is important to note that the Group health coverage for COBRA participants will typically cost more since your employer pays a part of the premium and you as an active employee paid a portion of the cost. Since you are no longer an active employee, your employer will no longer subsidize part of the cost of your health coverage. When you participate in COBRA, you would generally pay the entire premium. Cost of COBRA cannot exceed 102% of the cost of the plan for employees (remaining employees) who were not part of the qualifying event.

Typically, you will receive an election notice no later than 14 days after the qualifying event has occurred. You or your beneficiary normally has 60 days to decide whether to elect COBRA continuation coverage and 45 days after electing coverage to pay the initial premium.

If you intend to elect COBRA continuation coverage, make sure you have received the election notice from your employer; submit your claim according to your company’s plan rules within the time frame provided to you.

If you can no longer get any insurance from your employer, you may be able to get insurance through Affordable Care Act via your own state health exchange. The ACA is a very complex health plan. I suggest everyone tries to educate oneself how this impacts all of us. People in California should check the Comparison Chart to see what is covered for free and how much is your deductible and out of pocket expenses. Unfortunately there is no information on the premium. It will depend on who you pick as a provider and type of coverage you will need. Below is the web address. HealthPlanBenefitsComparisonChart.pdf

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