COBRA Administration

“COBRA” stands for Consolidated Omnibus Budget Reconciliation Act of 1985.  COBRA is the federal law that extends your current group health insurance when you experience a qualifying event such as termination of employment or reduction of hours to part-time status.

COBRA is the federal health care continuation law. COBRA requires that if an employee or other “qualified beneficiary” loses employer-provided health coverage due to termination of employment or another specified “triggering event,” the group health plan must offer continued health care coverage to the qualified beneficiary. The qualified beneficiary may be (and typically is) required to pay the full cost for the coverage.

Indemnity policies, PPOs, HMOs, and self-insured plans are all eligible for COBRA extension.  Federal government employee plans and church plans areexempt from COBRA.  Individual health insurance is also exempt from COBRA extension, which may be another reason to pursue participation in group health plans, if possible.

COBRA coverage has limited duration. In most cases, the maximum COBRA period is 18 or 36 months from the date of the qualifying event.  As of January 1, 2003, California Insurance Code (CIC) Section 10128.59 provides a special extension under Cal-COBRA for those who have exhausted their 18 months on federal COBRA (or longer in special circumstances) for a total extension that cannot exceed 36 months. For the special COBRA extension to apply, you must have become eligible for COBRA after January 1, 2003.

Senior COBRA:  Under Cal-COBRA, special provisions have been made for seniors. These provisions are commonly referred to as Senior COBRA. If you are 60 years or older at the time of your COBRA or Cal-COBRA qualifying event (for example, termination of employment) and have been employed five years or more with the employer sponsoring your group health insurance, then Senior COBRA can extend your coverage up to 5 years or until you reach age 65. Senior COBRA allows you to maintain continuous coverage until you are eligible for Medicare. In order to be eligible for Senior COBRA, you must meet the qualifications for COBRA or Cal-COBRA and elect and exhaust the coverage.

COBRA affects groups of 20 OR MORE EMPLOYEES. Employee count includes all full and part time employees on the payroll on 50% of the working days in the prior calendar year.