There should not be a lapse in coverage for COBRA beneficiaries.
Under a 1985 federal law, eligible workers can continue group health insurance coverage benefits after they lose or change jobs, but only if they opt to continue coverage within a specific time period.
History
To continue group health coverage under COBRA, you must apply.
COBRA--the Consolidated Omnibus Budget Reconciliation Act of 1985--allows workers in a company with 20 or more employees to continue their group health insurance coverage typically for up to 18 month after they lose their jobs for reasons other than gross misconduct, as long as the company continues offering group health insurance to employees.
Time Frame
Under COBRA, an employee has 60 days to decide whether to continue coverage under his old job and another 45 days to pay the first premium. Once enrolled, the employee is responsible for 100 percent of the COBRA premium plus a two-percent administration fee.
What if I Don't Sign Up for COBRA On Time?
If you don't continue group health coverage under COBRA within 60 days, you may lose your preexisting condition protection under a new individual policy or group plan. You also may be rejected for an individual policy without preexisting condition protection.
Is COBRA Coverage Automatic?
No. You must sign up to continue employer group coverage under COBRA. The employer must notify you that COBRA is available within two weeks after you would qualify. In the case of family changes, such as divorce or death of a spouse, the beneficiary must notify the employer's plan administrator of the event that qualifies her for COBRA benefits.
Who Administers COBRA?
The U.S. Department of Labor is responsible for administering the COBRA program.
Warning
When COBRA coverage expires, there are two options to continue coverage under the Health Insurance Portability and Accountability Act. First, see if the group health plan offers a HIPAA conversion policy. If not, you can seek a HIPAA Conversion/Alternative Mechanism policy, but make sure there is no coverage lapse or the alternative policy won't cover outstanding medical bills.
Tags: group health, coverage under, continue coverage, continue group, continue group health, coverage under COBRA, group health insurance