COBRA EXTENDS HEALTH BENEFITS
The Consolidated Omnibus Budget Reconciliation Act is better known as COBRA. Its acronym sounds venomous, but COBRA is the antidote for people who have just lost their jobs or experienced a change in status that would otherwise end their Health coverage. The 10-year-old act requires qualifying employers to continue to provide Health insurance to eligible employees for a specified period after they have been released from their jobs.
COBRA takes effect in these circumstances:
- Death of a covered employee (of course, benefits apply to the family of the deceased)
- Divorce or legal separation from a covered employee
- Employee is called to active military duty
- Employee's dependent child exceeds the plan's eligibility age
- Employer declares bankruptcy
- Termination for normal causes or a reduction of worker hours below minimum hours for plan eligibility
COBRA may expire or be terminated under these conditions (current legislation before Congress may affect some of these conditions):
- At the end of the 18-, 29-, or 36-month maximum period of effective coverage stated in the plan's terms
- The date the employer ceases to provide any Group Health plan
- When an employee or a beneficiary fails to pay the required premium
- After an employee becomes eligible for Medicare
- When the employee or beneficiary obtains coverage under another plan
To fulfill its legal obligation, the employer should coordinate every change relevant to the issues just listed in a worker's employment status with the health plan administrator.