COBRA Coverage Qualifying Events

COBRA coverage goes into effect only in the case of certain qualifying events to ensure employees and their beneficiaries have the right to continue their current health insurance coverage for anywhere from 18 to 36 months, possibly longer depending on the circumstance and the plan. Beneficiaries also have the right to deny COBRA coverage. In order to activate the COBRA coverage, a qualifying event must occur. The qualifying event is something that would cause the beneficiary to lose their health coverage.

If the employee has been terminated as a result of gross misconduct, COBRA coverage does not come into play. COBRA will cover the employee, the employee's spouse, and the employee's dependent children. The coverage comes at a price, though because the employer is not obligated to pay any of the premium and the employee may have to pay up to 102% of the cost. The only case where this does not apply is under the American Reinvestment and Recovery Act of 2009 where an employee left his job between September 1, 2008 and December 31, 2009. In this case, the employee only pays 35% of the premium and the employer pays 65% which then becomes a tax credit for the business.

 

Qualifying Events for Covered Employees

  • Employees who quit or are terminated for any other reason besides "gross misconduct" or have a reduction in hours are qualified to receive COBRA coverage.

 

Qualifying Events for Spouses

  • Spouses of employees who quit or are terminated for any other reason besides "gross misconduct" or have a reduction in hours are qualified to receive COBRA coverage.
  • The covered employee becomes eligible for Medicare.
  • Divorce or separation from the covered employee.
  • Death of the covered employee.

 

Qualifying Events for Dependent Children

  • Spouses of employees who quit or are terminated for any other reason besides "gross misconduct" or have a reduction in hours are qualified to receive COBRA coverage.
  • The covered employee becomes eligible for Medicare.
  • Divorce or separation from the covered employee.
  • Death of the covered employee.
  • Loss of a dependent child, as according to the plan's definition of a "dependent child."

 

When one of these qualifying events happens, the beneficiary has 30 days to report it to the employer. Once the employer is informed, the company must notify the plan. When the plan is notified, it will send a form to all beneficiaries to allow them to elect to participate in or deny the coverage. Each beneficiary has the right to make his or her own decision in regards as to whether or not to take the coverage extension. When an employee elects to participate in the employer plan, he or she will get information as to what the plan covers. When the COBRA coverage is activated, he or she will receive information as to what the COBRA coverage will cover.



Do I qualify for COBRA health insurance if I was fired from my job?



COBRA health insurance is available to employees who have been fired from their jobs provided they were not terminated due to gross misconduct. Their health plans must also qualify under the COBRA rules. Former employees of companies that employ fewer than 20 people and former employees who had certain church health plans are exempt from COBRA coverage. Someone who has been fired should be notified within 14 days of his rights to COBRA coverage, and the ex-employee will have 60 days to decide if he wants to accept the COBRA option. COBRA insurance covers the ex-employee as well as all dependents who were on the original employee health insurance plan.

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