Happens When COBRA Ends?
By Jacques Chambers, Benefits Counselor
month’s column described how someone could stay on their
employer’s health insurance even after they stop working
there. But COBRA only lasts 18 months for terminating
employees. What happens after that?
are two federal laws that can be used to continue health
insurance once your COBRA Continuation Coverage ends. Both
provide access to health insurance without having to prove
that you are “insurable.”
you leave work due to disability……
was amended to allow people, who had to stop work due to
disability, to extend the time they can keep COBRA
Continuation. Under this law, someone who qualifies may stay
on their employer’s COBRA Continuation until they become
eligible for Medicare, which is normally 29 months after they
leave work due to disability.
to qualify for this extension of COBRA, you must meet several
must apply for Social Security Disability Insurance (SSDI)
Social Security must approve your benefits during your initial
18 month COBRA period.
Onset Date of your disability, must be within 60 days of the
start of your COBRA coverage.
Finally, you must provide a copy of your Social Security
Notice of Award letter to your COBRA administrator within 60
days of receiving it AND within 18 month COBRA period.
for a practical look at each of these requirements:
COBRA is letting Social Security decide who was disabled when
they stopped working with this requirement. If you didn’t
pay into Social Security because you were a public school
teacher or government employee and are therefore not
“financially eligible”, Social Security is still required
to review your medical records to see if you are disabled
enough to qualify for benefits if you were eligible. You need
to tell them you are applying to extend COBRA when you first
SSDI claim must be approved during the original 18 months of
COBRA. If there is a denial and you have to wait to appeal
before an Administrative Law Judge, and it goes beyond 18
months, you lose your chance to extend COBRA even if your
claim is later approved.
Social Security will determine the onset date of your
disability. That is the date they believe you became disabled
and the date from which they start counting the five-month
waiting period of benefits. Even if the approval letter comes
in the last few months of your COBRA Continuation, you can
still qualify for the extension if the Onset Date given in
your approval letter is within 60 days of the COBRA Qualifying
rule has unfortunately cost many people their right to stay on
COBRA. The COBRA administrator is usually your old employer
but they may have contracted with an outside firm to
administer their COBRA people. A good rule of thumb is that
the copy of the Social Security Notice of Award letter should
go to the same place that you pay your COBRA premiums to. Ask
for a receipt or otherwise confirm that the letter was
a good way to stayed insured since it allows you to stay on
your employer’s health insurance plan until you become
eligible for Medicare. The primary drawback is that during the
months after the first 18 months of COBRA, the employer can
(and will) charge you the actual premium PLUS 50%. For
example, if you were paying $200 per month on COBRA, the
extended months will cost $300 per month.
your COBRA ends and you don’t qualify for the disability
federal law, called HIPAA, provides that people losing their
employer’s coverage after COBRA expires, have a one-time
opportunity to move to a broad benefit individual health
rules on qualifying for individual coverage are not
must continue your COBRA Continuation as long as possible. You
cannot drop COBRA at any time and move to the individual plan.
must have been continuously covered under health insurance for
at least 18 months. That’s easy, since COBRA itself lasts 18
months or longer.
must sign up for the individual coverage within 63 days of the
end of your COBRA insurance.
plans you will have a guaranteed right to buy will change from
state to state. Some states require that everyone purchase
coverage from one central plan. Other states require every
insurance company writing individual health insurance to carry
“HIPAA coverage plans” and each person can go with the
company of their choice. Either way, the coverage must be
broad, and will almost always include prescription drug
coverage. Companies offering “HIPAA” plans must offer
their two most popular health plans based on premiums written.
insurance lobby wasn’t totally asleep when this law was
passed, so there are no limits on what carriers can charge. It
will definitely cost you more than buying coverage on the open
market. The cost will also vary dramatically by location.
your COBRA Continuation coverage ends, the insurance company
or administrator is required to send you what is called a
“Certificate of Creditable Coverage” which is usually
simply a letter confirming the starting and stopping dates of
your coverage with them.
presenting that letter to the HIPAA plan or carrier, the plan
is required to let you purchase the coverage.
to these two laws, now, if you ever become insured under an
employer health plan, you will be permitted to maintain health
insurance indefinitely, even after your employment terminates.
Chambers is a benefits counselor in private practice. He has
over thirty years in benefits and advocacy. You may contact
him through his web site at http://www.helpwithbenefits.com