As a divorce attorney, I get a lot of questions about Consolidated Omnibus Budget Reconciliation Act (“COBRA”). More specific information relating to your family’s health insurance should be investigated by you and your spouse via the applicable employer.
Generally speaking, COBRA is governed by the Employee Retirement Income Security Act (“ERISA”) and applies to covered employees, their spouses, their former spouses and dependent children due to qualified events. A divorce or legal separation is a qualified event.
Importantly, COBRA should extend coverage for a maximum period of 36 months in the case of divorces or legal separations. Early termination can take place if 1) there is a failure to pay timely premiums, 2) employer ceases to maintain the group health plan, or 3) qualified beneficiary engages in fraud. It too will terminate if the qualified beneficiary begins coverage under another group health insurance plan or eligible Medicare coverage. An 18-month extension can be sought if there is a disability or another qualifying event.
It is the employee’s responsibility to notify the employer in the event of a divorce or separation. It is NOT the employer’s responsibility to discover the divorce on its own. Depending on the plan, you may only have between 10 to 30 days to provide notice to your employer after the qualifying event. In return, the employer must provide qualified beneficiaries the COBRA Election Notice within 14 days. You will then typically have a 60-day COBRA election period.
COBRA is only applied to qualified employers. The COBRA general notice of rights should have been provided to the eligible employee within ninety (90) days from date of coverage. This should also be obtained upon request and is sometimes referred to as the Summary Plan Description (“SPD”).
In such cases, employers may require individuals who elect coverage to pay a 2% administrative charge or 102% of the cost of the current policy. The cost of a policy may increase but are typically locked in for 12 months.
COBRA essentially extends the current covered medical care under the group health plan which may include dental and vision care; in fact, the medical coverage received should be identical to the coverage that is currently covered under the plan or similarly situated active employees. Importantly, life and/or disability insurance are not covered under COBRA and is not considered “medical care.”
Under the Health Insurance Portability and Accountability Act (“HIPAA”), you may have a right to special enroll (i.e., enroll without waiting until next open enrollment) in other group health insurance. You likely only have 30 days to request special enrollment after the divorce or legal separation. You are also eligible for special enrollment under the COBRA election if you have another type of qualifying event such as remarriage, birth of a child or COBRA time exhaustion.
You can also explore options with Marketplace coverage. To apply for Marketplace coverage, pales visit healthcare.gov or call 1-800-318-2596. When doing so, you can also investigate whether you are eligible for Medicaid or Children’s Health Insurance Program (“CHIP”). More info on CHIP can be obtained by calling 1-877-KIDS NOW or visiting insure kids now.gov. You likely only have 60 days to apply for a Marketplace plan after a qualifying event (i.e., divorce or legal separation) so time is of the essence to explore options now.
More information on COBRA, the Affordable Care Act (“ACA”), HIPAA, or ERISA can be found by visiting the Employee Benefits Security Administration (“EBSA”) at www.dol.gov/agencies/ebsa.