A Simple Explanation of COBRA and Insurance Rights for You and Dependents
written by: Kristie Lorette•edited by: Donna Cosmato•updated: 5/12/2011
If you have moved from being insured by an employer group health insurance plan to no coverage, then you need to get know COBRA and your insurance rights. Not only does the COBRA bill cover you as the employee, but it may also cover your dependents.
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Who Is Eligible for Coverage?
Health insurance is an expensive necessity in this day and age. Rising health costs make it difficult for employers to provide health plans to employees and for uncovered individuals and families to obtain the proper health insurance coverage. Fortunately, for many employees, their employer offers health insurance coverage for both them and their dependents. Getting to know about COBRA and insurance rights for you and any dependents may be the key to getting the coverage you need.
If you are or were an employee of a company that offered a group health insurance plan for 20 or more employees, you may be eligible for COBRA coverage even after the employer-sponsored plan no longer covers you. In addition to meeting this requirement, you also have to have been covered for over 50 percent of the working days included in the previous calendar year.
Additionally, if your dependents were covered by the policy, when the coverage goes away, you and your dependents are eligible to obtain COBRA coverage.
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Reasons COBRA Coverage Kicks In
A qualifying event is what triggers your COBRA insurance rights for you and dependents to go into effect. Therefore, you also need to understand what types of events make you and your family eligible for the insurance coverage. Qualifying events include:
Getting fired—as long as it is not for “gross misconduct"
Reduction in the number of work hours (such as from full-time to part-time)
COBRA coverage for your spouse kicks in for the same qualifying events. Spouses can also qualify for COBRA insurance coverage if:
Insured employee becomes eligible for Medicare
Divorce or a legal separation occurs
Insured employee’s death
Dependent children have the right to COBRA insurance under all of the same circumstances as a spouse. There is one addition for child dependent coverage, which is the loss of the status as a “dependent child" under the current insurance policy rules.
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Type of Coverage
When the employee and dependents opt for COBRA insurance coverage, the insurance coverage must be the same as what was received under the employer-sponsored plan. For example, if the employer-sponsored insurance coverage offered health, vision, and dental insurance, then the COBRA insurance rights for you and your dependents must be equivalent coverage. While the coverage may be the same, COBRA coverage is only available for up to 18 months after the qualifying event, and you may be responsible for paying the full premium amount to carry the coverage.
To obtain more information on COBRA coverage, talk with the human resources manager for your employer or the person at the company who is in charge of the health insurance. By law, a qualifying event also must be reported by the employer so that COBRA information is mailed to your mailing address.
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