Your COBRA Rights in Texas
The Consolidated Omnibus Budget Reconciliation Act of 1985 (26 USC Sec. 4980B, 29 USC Secs. 1161-1167, and 42 USC Secs. 300bb-1–300bb-8), established certain duties on the part of employers with respect to continuation of health care coverage under employer-sponsored plans when certain defined triggering or qualifying events occurred.
These events are:
- termination of an employee’s employment;
- reduction in an employee’s hours (that take that employee below the minimum number of hours to be eligible for the employer’s health plan(s);
- divorce or legal separation (that is, a covered dependent spouse ceases to be eligible for dependent coverage under the plan because he or she has divorced (or been divorced by) the subscriber or become legally separated from the employee/subscriber
- the employee becomes eligible to receive Medicare benefits
- a dependent child ceases being a dependent or exceeds the maximum age for which dependent children can be eligible for coverage under the plan
- the employer files a chapter 11 petition in bankruptcy.
In the event of a qualifying event, the employer is required to notify the employee of his or her COBRA rights within thirty days. The employee has sixty days from the date of the qualifying event to exercise his or her COBRA rights to continue any or all of the employer sponsored health-care coverages.
This includes not only the medical/health coverage, but also dental plans and vision care plans.
To exercise the right to continue any such coverages, the insured must tender payment of the full amount of the first month’s premiums for all coverages to be continued for the insured and for all dependents, and must do so within the sixty day period.
Your COBRA notification letter must state specific amounts in clear language as to how much you must pay to effectively exercise continuation of benefits. If you maintain coverage pursuant to COBRA until you are eligible for coverage under a new employer’s plan with no preexisting conditions exclusions concerns.
The premium charged for continued coverage when the insured exercises COBRA rights can include an administrative fee of up to 2% of the full amount of the premiums for the coverages elected to be continued, including all dependents. The premiums on which this administrative charge are based are those in effect for the insured and his or her dependents at the time of the qualifying event. The insured must deliver, not mail subsequent months’ premium payments to the employer before the month to which the premiums apply.
The law is unclear whether that means deliver a check or deliver funds (i.e., the check must clear). If you exercise COBRA right, that is your health care until you have alternate health care. The coverages offered when an employee exercises COBRA rights must be identical to those the employee had before the qualifying event occurred.
This means that if the insured elects to continue the health-care plan coverage, all the terms and conditions of the COBRA health-care coverage must be identical to those the employee had before the qualifying event. If the insured/employee elects to continue dental coverage or other coverage previously carried by the employee before the qualifying event, the continuation coverages must be identical to those in existence before.
The available duration of COBRA coverage varies depending on the nature of the qualifying event. Where the qualifying event is a termination of employment, the maximum period of coverage is eighteen months, which may be extended to twenty-nine months if the insured is disabled.
For categories of qualifying events other than termination, the maximum duration of COBRA continuation coverage is thirty-six months. If the qualifying event is the bankruptcy of the employer, the duration of the right to continue coverage under COBRA is lifetime for retirees and widows/widowers of retirees if their spouses die before the bankruptcy filing of the employer.
Where the employer’s bankruptcy filing predates the death of the retiree, the surviving spouse is entitled to continuation of coverage under COBRA for thirty-six months. In all cases, when an individual reaches the end of the applicable maximum period of continuation of health-care coverage under COBRA, the health-care plan is obligated to offer the individual the opportunity to purchase conversion coverage.
Such an offer of conversion coverage must be made within 180 days before the expiration of continuation coverage. The conversion plan offered must be one generally available from the provider.