HoG Handbook
 

Extending Group Insurance

 

extending group insuranceCOBRA

A federal law known as COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) protects some people who are about to lose employee group health insurance. Those covered by the law can continue group coverage for a certain time at their own expense. The law generally covers group health plans maintained by employers with 20 or more employees in the prior year. 

Among those affected are:

  • employees who leave their jobs or who are laid off
  • full-time employees whose hours are reduced to part-time so that they become ineligible for benefits
  • early retirees
  •  widows or widowers of the insured
  • recent ex-spouses of the insured
  •  young people who become too old to be covered under their parents' plans

Generally speaking, this law allows the employee or eligible family members to keep the insurance for 18 months after leaving a job. A child who becomes too old to be covered on the parent's policy can be covered for 36 months. The insured pays group rates plus a small surcharge. This may still be cheaper than buying a new individual policy and you may want to compare your options. For most, group policies often offer better coverage than individual plan.

The coverage ends if the insured person doesn't pay the premium. It also ends if the insured person gets other coverage, for instance, through a new job. 

If your former employer drops the group policy or has too few people on the policy, you can’t extend your coverage with COBRA.

There is a limited time to request extended coverage through COBRA. Pay attention to important deadlines and follow-up to be sure employers file the necessary documentation, because once a person loses their original coverage it will be too late to request an extension. Insurance companies must be told about any changes such as marriage, divorce, or a child reaching the age limit.

You may find it helpful to talk to your HTC social worker before making changes in employment that affect your health insurance. The social worker can help you navigate the COBRA program with your employer and determine your options.

Conversion

If you have group health insurance, you may be able to convert it to an individual policy when you leave your job. Information about this will be in the group insurance policy rules. You can also get information about conversion from your company’s Human Resources department.