| Group Health Insurance After
Employment Ends
What Is COBRA Insurance?
COBRA insurance is based on a law that allows certain employees
and their dependents to buy continued health insurance coverage
through the employer's health plan when the employees stop working.
In New York, COBRA applies to group health plans offered to most
employees, except for Federal Government employees and certain other
special types of employees. It is available to employees in New
York, regardless of the number of employees in the organization,
so long as the employer continues to offer the group coverage to
current employees.
How Do I Obtain COBRA?
In order to obtain COBRA, you need to have been a member of the
employer's group plan when you were last employed. At the time of
your departure or soon after, the employer is required to offer
you in writing the option of selecting COBRA health insurance. You
will have 60 days to make the selection from the time the written
option is sent or given to you.
If you select COBRA health insurance, the employer will ask you
to pay for the premium on the coverage plus an extra 2% surcharge.
You are responsible for the payment; however, there are some Government
programs available in New York State that will assist with the payment
based upon certain income/asset criteria. Please note, the initial
payment must be made within 45 days of the date that you select
to have COBRA insurance. In addition, the payment must cover the
period from the time you last were covered through the present.
Why Would I Want COBRA?
COBRA health insurance allows you to continue the health care benefits
that you had when you were an employee in the group health plan. Continuity of care is important.
Although you no longer work for the employer, you will have the
same health care benefits from the same plan as current employees. Therefore, if the
employer changes health care plans, the COBRA members' plans change
as well.
COBRA health insurance lasts a minimum of 18 months or until you
receive coverage through a new employer or through purchase of an
individual plan. COBRA can last as long as 29 months, if you leave
your job for disability reasons or become "disabled" (as defined
by Social Security) within 60 days of leaving and
are approved for Social Security Disability Insurance (SSDI) during
the first 18 months. You need to notify the former employer or the
health plan administrator as soon as you are approved for SSDI or
within 60 days of the date of the approval to get the full 29 months
of coverage.
Here's another way to describe the timing:
- COBRA can last a minimum of 18 months
- COBRA can be extended for an additional 11 months if:
a) you left your job for disability reasons, or
b) you become disabled within 60 days of leaving your job,
AND
c) you are approved for SSDI within the first 18 months of COBRA
coverage
How Does COBRA End?
COBRA health insurance terminates if:
1) the employer stops plan coverage for all employees, or
2) you fail to pay the premium on time, or
3) you obtain coverage through another employer group plan, or
4) you elect to stop COBRA and replace it with an individual health
coverage, or
5) you become eligible for Medicare.
COBRA and Medicare?
Medicare is a health insurance plan offered by the Federal Government
for people 65 years of age or older as well as people with disabilities
who have been approved for Social Security Disability Insurance
(SSDI).
Medicare begins in the 29th month of disability based on the official
Social Security date of disability. If you have the 11 month extension
which allows you to maintain COBRA health insurance for 29 months,
you would be able to have COBRA health insurance up until the point
that Medicare eligibility begins.
However, it may be advisable to drop COBRA health insurance before
Medicare starts. This is because you may want to replace the COBRA
health insurance with an individual health insurance policy before
Medicare begins. Federal Law prohibits you from purchasing individual
health insurance coverage after Medicare eligiblity is reached. It will be helpful to plan your insurance coverage several months before Medicare starts in order to secure the best health care coverage and access to prescriptions. Is There Anything Else I Need to Consider?
Yes. Some things to think about are:
- What if I can't afford to pay the COBRA insurance premium?
- Will I still get prescription coverage?
- How much in advance of Medicare should I start to look at my
options?
- What if my employer keeps me on the health insurance plan without
offering me COBRA?
- What if I return to work?
- Can my COBRA extend beyond my Medicare eligibility date?
These are very important questions that could impact your health
care. An individual consultation with a GMHC Advocate would be an excellent
way to find out the answers.
Client Advocacy at GMHC is available to assist
you. For more information, please call our Helpline: 212/367-1125,
Wednesday 2 pm to 5:30 pm. Walk-in services are available Tuesdays and Thursdays, 10 am to 1 pm.
Revised 3/07
© 2007 Gay Men's Health Crisis
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