COBRA Continuation Notice May Contain Info on Health Insurance Options

Workers who have been laid off or had their hours significantly reduced due to coronavirus may be eligible to continue their current health insurance under a COBRA plan.

About COBRA

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, allows people who have been laid off to continue to receive coverage through their existing employer-sponsored health insurance. This may be important for people who want to keep seeing the same doctors, or who know they will need health coverage until they are able to obtain insurance through their next job.

Under COBRA health insurance, people keep their same coverage, with the same plan and benefits. However, they are responsible for all the costs of this coverage. While employers generally pay for a significant portion of employee health plans, COBRA plans are entirely paid for by the recipient of the insurance. The difference in cost may be very expensive, as employers generally pay between 70 and 80 percent of the cost of employee health plans.

According to the Kaiser Family Foundation, the annual premium cost for employer-sponsored health plans is almost $7,000 for an individual, and more than $19,000 for a family. Additionally, employees who opt for COBRA coverage are also responsible for a 2 percent administration fee, on top of the cost of the plan. Although these costs may be very steep, for some people it may make sense to continue with their existing health coverage. Other short term health insurance plans obtained through the health insurance marketplace may be less expensive, but may offer fewer benefits.

People who choose COBRA health insurance may be covered by their plan for up to 18 months after leaving or losing their job. Some people may be eligible to receive coverage for up to 36 months, if they meet certain criteria, including losing coverage due to a divorce or death.

Who Qualifies for COBRA?

Employers with at least 20 employees are usually required to offer COBRA coverage to workers who quit or are laid off. This coverage is often also available to the spouses, former spouses, widows, and dependent children of the employee, if they were covered by the employee’s original employer-sponsored plan.

People who leave their job may qualify for COBRA regardless of whether they left voluntarily or were fired. The exception is for cases of gross misconduct. Additionally, workers who have had their hours significantly reduced may also qualify.

Employees who qualify for COBRA should receive a notice from their former employer regarding their eligibility and potential benefits.

What is a COBRA Continuation Notice?

A COBRA continuation notice alerts employees who have left their jobs of their eligibility to enroll in COBRA. If you qualify for COBRA insurance, your employer is required to send you a COBRA continuation notice within 44 days if they don’t use outside administrators. If they do use outside administrators, this notice must be sent within 14 days. After this notice is received, you will have 60 days to decide whether you want to choose to enroll in COBRA or find a different health insurance plan.

What Does a COBRA Notice Include?

A COBRA continuation notice is required to include several key pieces of information. This information includes the name of the insurance plan that would continue under COBRA, the date that the current plan will end if the person does not opt-in to COBRA, and information regarding when COBRA coverage could begin. The notice must also give information on the procedure for choosing COBRA, as well as an explanation of what will happen if coverage is or is not continued.

The notice should also include the name, address, and phone number of the plan administrators, the identification of the qualified recipients of the plan, and the identification of the event qualifying them to receive COBRA coverage. Employers who do not send employees COBRA notices may be subject to penalties. Additionally, employers who send COBRA notices that do not include all of the required information may also face penalties.

If you are between jobs and your previous employer did not send you a COBRA continuation notice informing you of your health insurance options, you may be eligible to file a class action lawsuit or open an investigation. Even if you did receive a COBRA notice, this notice may not have included all of the pertinent information necessary for you to make a decision regarding your health insurance. Hiring an experienced attorney to review your case may be the first step towards pursuing compensation.

Join a Free COBRA Class Action Lawsuit Investigation

If you received a COBRA notice that did not fully disclose your rights and how to retain your health insurance following separation from your job, or you received no notice at all, you may be qualify to join this COBRA notice class action lawsuit investigation.

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This article is not legal advice. It is presented
for informational purposes only.