COBRA Continuation Coverage: Early Termination

COBRA continuation coverage encompasses a period of 18 months from the time you lose your health insurance coverage, but can be terminated early by your employer if they choose to cancel the group health plan.

 

Early Termination

 

According to federal law, your employer isn’t required to provide you with health insurance coverage, so in turn, they aren’t required to continue any plan coverage once instituted within the company. Under the Internal Revenue Code rules, your employer can terminate COBRA coverage early for you and your family once it discontinues any group health plan, but if the employer activates another group health plan, it’s obligated to continue your COBRA coverage.

 

If your employer goes out of business or fails to pay their insurance premiums, the carrier will refuse to provide coverage, causing an early termination of your COBRA insurance. Likewise, if you fail to make your COBRA insurance payment, the coverage will terminate early. When you’re covered under a new group health plan, your COBRA coverage may receive an early termination, unless the new plan has pre-existing conditions or waiting periods that exclude you from coverage. In this case, COBRA coverage may not terminate early until the conditions or waiting periods have been met.

 

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