COBRA Frequently Asked Questions
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires most employers with group health plans to offer participants the opportunity to continue group health coverage under their current plan, if a qualifying event has occurred.
Frequently Asked Questions
What is a qualifying event?
There are 5 events that are considered "qualifying"
1. The death of a covered employee.
2. The termination of an employee (not considered gross misconduct); or the reduction of hours, of a covered employee's employment.
3. The divorce or legal separation of a covered employee from the employee's spouse.
4. A covered employee becoming entitled to Medicare benefits under title XVIII of the Social Security Act.
5. A dependent child ceasing to be a dependent child of the covered employee under the generally applicable requirements of a plan and a loss of coverage occurs.
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A qualified beneficiary is someone who is covered under the plan immediately prior to the qualifying event. This includes the covered employee (only if the qualifying event is a termination or reduction in hours) and the spouse or dependent child of the covered employee.
How do I elect COBRA continuation?
You will need to complete the form on page 7 of the Election Form in its entirety. Please include the date of birth & Social Security numbers for all dependents that are to be covered. Sign and date the form and return it to Chard Snyder for processing. You may elect one or all of the benefits under which you previously had coverage. In addition, you may elect the same amount of coverage as you received, or you may elect less coverage than you received, but you may not elect more coverage then you received as an active employee. All of this information is found on page 6 of the Election Form. Here is an explanation for some of the terms:
Coverage Type = the plan under which you had coverage (Ex: UHC-PPO)
Tier Type = the level of coverage you had or wish to elect (Ex: EE+ Family)
Rate = the monthly premium amount for the coverage being elected
When are my premiums due?
All premiums are due on the first of each month. You have a 30-day grace period to remit your premium(s); however, you will not have coverage until the carrier has been notified that you have paid the premium(s) in full. For initial premium(s), you have 45 days from the day you elected coverage to make the first payment for any back due premiums. But remember, you will not have coverage until all premiums have been paid in full.
Do I have to pay for the months for which I did not need coverage after my termination?
Yes, COBRA begins on the last day you had coverage before terminating employment. All premiums that are past due must be made up or your coverage cannot be continued. Once all premiums have been paid in full, the carrier can retroactively cover any claims incurred during that time.
How do I make my payments for COBRA and to whom?
There are two methods of payment for COBRA: You may pay by check or cash. Credit card payments or payments over the phone cannot be accepted at this time; however, we are now accepting payments from your personal bank account on our website. All payments should be made payable and remitted directly to Chard Snyder.
Will I be billed for my premium(s) each month?
Once you elect COBRA, you will receive coupons that can be used through the end of your plan year to remit payments. Each plan year, you will receive a new set of coupons. There will be no billing, invoicing or reminders sent to you. It is your responsibility that your premiums are paid on time. You may call or email us for an update on the status of your account at any time.
What happens if my premium is late?
If you do not make your payment within the 30-day grace period, your coverage will automatically be terminated without advance warning. You will receive a termination letter at that time to notify you of a lapse in your coverage due to non-payment of premiums. Once your coverage has lapsed, it cannot be reinstated.
Can I pay just part of the month if I do not need the full month of coverage?
No, premiums cannot be prorated for a shorter period. You must pay the full premium amount for each month. Partial payments will be accepted, but cannot be reported to the carrier until the full amount has been paid. You will not have coverage until all premiums have been paid in full.
How is this insurance different from what I had?
There is no difference in the insurance plan that you now have under COBRA. All plan rules and coverages are exactly the same as you had before you terminated employment. The only difference is that you are now paying the actual full cost of the premium instead of just the employee contribution amount.
Who do I call when I have a problem with a claim or want to know more about my insurance plan?
All inquires regarding coverage or claims activity are to be sent directly to the carrier, just as you did before you elected COBRA. There is a contact number located on the back of your insurance card(s) to call for assistance. Again, this is the same insurance that you had before you elected COBRA. If, however, your insurance carrier does not have a record of your COBRA election in their system, please contact us for assistance.
How do I avoid interruption in my coverage?
The best thing to do is to make your COBRA election as soon as you receive your Election Form and return it to us with the appropriate amount due immediately. Unfortunately, there is often a slight delay in the carriers updating their systems to reflect COBRA elections and payments received and credited. If you have an ongoing medical issue, it would be in your best interest to return your paperwork as soon as possible. Legally, you have 60 days to elect COBRA and then another 45 days to make up any past due premiums. Suggesting that you send in the election form and payment as soon as possible is only an answer to the question of what is the best way to avoid interruption of coverage and not anything that is mandated by the IRS or any other governing agency.
What happens when my COBRA period has expired?
When your COBRA period has ended, it will be your responsibility to find other insurance coverage. There are no extensions available for COBRA other than those governed by law (see page 2 of your Election Form). Some carriers may provide conversion policies, but it is your responsibility to call them and get the information that you need.
What paperwork should I keep?
Please read the Election Form you received in its entirety. When you return your signed Election Form, make a copy before sending it to Chard Snyder and keep it for your records.
Who do I contact for more information?
If you need assistance with your COBRA plan, please contact us.