6 Significant Facts about Cobra Continuation Coverage

Author: Kenneth Sprang
1. Term of coverage
The term of coverage for employee, spouse, dependent child in case of termination/reduction in employment hours is 18 months. The term of coverage for spouse, dependent child if the employee enrolls in Medicare is 36 months. The term of coverage for spouse, dependent child if the employee gets divorce/separated legally is 36 months. The term of coverage for spouse, dependent child on the death of the employee is 36 months and the term of coverage for dependent child if the child loses his “dependent child” status is 36 months.
2. Events that terminate COBRA coverage
There are certain events when an organization can terminate your COBRA coverage like premiums are not fully paid within time limits, the employer ceases to maintain any group health plan. COBRA coverage could be terminated even when a beneficiary starts coverage under another group health plan after electing COBRA or beneficiary becomes entitled to Medicare benefits after electing COBRA or COBRA misconduct.
3. Regular COBRA premium
COBRA Payments is 102% of Premium. The employer has no obligation to make any contribution. The employer may charge COBRA beneficiaries up to 102% of their premium in order to cover costs of administration, e.g., if the monthly premium for the beneficiary is $1000 per month, the employer may charge as much as $1020 per month for COBRA continuation coverage.
4. Conversion rights during termination
Converting group coverage to individual coverage must be offered within180 days before continuation coverage ends. No need to provide conversion privilege when COBRA terminates early.
5. Incorrect premium amount
Beneficiaries may be required to pay the full premium for COBRA continuation coverage, even if the employer contributed prior to the loss of benefits. The Premium cannot exceed 102% of the cost to the plan for similarly situated individuals who have not incurred a qualifying event. If the amount of a premium payment made to the plan is wrong, but is not significantly less than the amount due, the amount paid will be deemed to satisfy the plan's requirement for the amount that must be paid, unless the plan notifies the qualified beneficiary of the amount of the deficiency and grants a reasonable period of time (not less than 30 days) to pay the difference. Even if the plan does not send monthly premium notices, it must provide notice of underpayment or the amount submitted will be treated as full payment.
6. Avoid failure notices to spouse
In some circumstances, COBRA notice must be given to employee and spouse and/or other qualified beneficiaries. You can notify your spouse in these steps: may notify spouse by furnishing a single notice addressed to both employee and spouse if the two reside at the same location. No need to provide a separate notice to dependent children who share the same residence. Employees required notifying the plan administrator promptly of a separation, divorce, or any other event that results in a spouse and/or dependents no longer living at the same address as the employee.

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