Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)
 

 

COBRA ensures that, under certain conditions (qualifying events), employees have the right to buy continued health insurance coverage for themselves and their spouse and dependents through their former employer's group health-care plan.

Qualifying events determine how long COBRA coverage will be extended, such as:
Termination of employment---18 months of coverage
Disability---18 to 29 months of coverage. (This coincides with the Medicare waiting period.)
Reduction of work hours with loss of benefits---18 months of coverage
Death of covered employee---coverage can be continued indefinitely for an eligible spouse and until age 23 or marriage for dependents
Divorce or legal separation from covered employee---36 months of coverage

If you are entitled to COBRA benefits, your health plan must give you notice of your right to continue benefits provided by the plan. You must reply within 60 days to accept coverage or forfeit your right to continued coverage. Your monthly premium will be much higher than when you worked because you will have to pay the full cost of the premium.

To qualify for COBRA disability continuation coverage, you must apply for and receive Social Security Disability Insurance before (SSDI) the 18-month COBRA period ends. The date of disability onset, as determined by Social Security and stated in the Notice of Award letter, must be within 60 days of the start of your COBRA coverage, and a copy of the Award letter must be sent to COBRA within 60 days of receiving it.

 


Your COBRA coverage will be
terminated if you:
Become eligible for Medicare
Become covered under another group health plan, though you remain eligible for COBRA coverage until any pre-existing exclusion expires
Stop making premium payments
Your former employer cancels all of its group health plans
Note: COBRA coverage tends to be very expensive, so you may want to work with your case manager to find more affordable options that may be available to you.



For more information on COBRA
contact the state insurance department
where you live.

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The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
 

 

HIPAA is a federal law that prohibits employers and insurance companies from denying health-care insurance to an employee or his/her family member on the basis of medical history. It also enables individuals to take their eligibility for health insurance with them when they change jobs.

In theory, HIPAA increases a person's ability to move from one job to another without loss of benefits. HIPAA does not require companies to offer health coverage, so you could lose benefits if you move to a company without a health plan.
Continued insurance coverage to employees if they have had 18 months of continued health insurance in the past and it is less than 63 days between ending one coverage and starting new coverage
A limit of 12 months to pre-existing-condition clauses
Access to an individual health insurance policy after COBRA benefits expire
Immediate coverage for prenatal care
That insurance companies will offer coverage to small businesses (2 to 50 employees)

Three federal agencies monitor compliance with HIPAA: the Department of Health and Human Services, the Department of Labor, and the Department of Treasury.


For more information, contact the state insurance
department where you live.

 


HIPAA prohibits the following:

Charging higher premiums for workers who are ill

Denying coverage on the basis of genetic pre-disposition to certain conditions

Refusing to renew health insurance policies for anything other than non-payment of premiums, fraud, or non-compliance

Classifying pregnancy as a pre-existing condition


HIPAA tax provisions:

Long-term health insurance premiums are tax deductible

Early life insurance withdrawals for accelerated benefits are not taxable

Partial deductibility of health insurance premiums for the self-employed

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