COBRA stands for “Consolidated Omnibus Budget Reconciliation Act” and what people have to remember about it is the fact that it is a law and not an Insurance Provider, Company or Agency that is being peddled by the government. It was passed in 1986 in connection with the Department of Labor of the United States and it aims to assist and protect individuals and beneficiaries who are having unstable job or those that are in the middle of a financial and social crisis. It works simply by providing an extension to the Insurance Coverage despite being terminated from a job.
It is more expensive for company’s to avail of Group Policies that have COBRA, but it is generally more beneficial to their employees to do so. Upon the change in an individual’s or a beneficiaries’ circumstances, he/she/they must then approach the insurance provider to choose to go on an Continued Plan Coverage (offered under the COBRA Insurance Law) or to pay for the Policy themselves or to let go of the policy all together. Below, you will find the periods in which the individual can avail of the Continued Plan Coverage.
The period of Insurance Coverage under COBRA vary depending on the situation that ensues. COBRA extends to the employee itself who may have had reduced hours of work, resigned or even terminated. It also covers the interests of the beneficiaries like an employees spouse or offspring. COBRA also includes Continued Insurance provision to the spouse of employees that are separated in divorce and also to the Offspring that have loss his or her dependent status upon reaching the legal age. The periods of provision are as follows:
• Qualifying Event: Termination of Employment Voluntary Resignation Reduced Hours of Service
Beneficiary: Employee Spouse Dependent Offspring
Period of Coverage: Eighteen (18) Months*
The employee himself or herself, the spouse or a dependent child may call on the benefits provider under the COBRA insurance. They may need this because of the circumstances that are mentioned above. The Eighteen (18) Month period stipulated can be extended to the full length of the insurance coverage under COBRA which is a Thirty Six (36) Month period.
• Qualifying Event: Legal Separation or Divorce Death of the Employee overed Under the Insurance Policy
Beneficiary: Spouse Dependent Offspring
Period of Coverage: Thirty Six (36) Months
In the event of death or separation from the covered employee, the remaining legal beneficiaries will still be able to avail of the extended period of coverage from the Insurance Provider through the COBRA agreement for a period of Thirty Six (36) Months. It may even be less if the individuals involved are deemed non-qualified for the COBRA system.
• Qualifying Event: Loss of Status as a Dependent Offspring
Beneficiary: Dependent Offspring
Period of Coverage: Thirty Six (36) Months
Children who reach the legal age (Twenty One in The United States) are no longer covered in their parent’s insurance policy. With the COBRA Insurance Program they are given the choice to avail of Continued Coverage for a period of Thirty Six (36) Months upon the notification of the Insurance Provider.
