Understanding COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation coverage is crucial when transitioning between jobs or experiencing other qualifying events. COBRA allows you to temporarily continue your group health insurance coverage after your employment ends, coverage is reduced, or other specific events occur. This article provides insight into the COBRA process, sample letters you might receive or need to send, and a general overview of your rights under COBRA.
The process usually begins with your employer notifying the plan administrator of your qualifying event. The plan administrator, in turn, is responsible for sending you an election notice. This notice details your rights to elect COBRA continuation coverage, the monthly premium amount, how to make payments, and the deadline for electing coverage. Carefully review this notice as missing the election deadline can result in a loss of your COBRA rights. Understand that this is a *temporary* solution and you should explore other coverage options during this period.
The information below provides sample COBRA letters to help you understand the format and key components of various COBRA-related communications. While these samples offer general guidance, remember to consult with a qualified benefits professional or legal expert for advice specific to your circumstances. Keep records of all correspondence, payment confirmations, and other related documents, as these may be important in case of any discrepancies.
Remember that eligibility, cost, and enrollment details can vary by state and specific employer plans. The specific COBRA regulations can vary between states and industries. Keep detailed records of communication between you and your prior employer or HR Benefits administrator. For more information about your coverage under COBRA, contact the U.S. Department of Labor (DOL) or a benefits administration professional.
Sample COBRA Letters & Notices
Below are sample COBRA letters. Remember to consult with a benefits professional for personalized guidance.
Sample Initial COBRA Notification Letter (From Employer/Plan Administrator)
[Employer/Plan Administrator Letterhead]
Date: [Date]
To: [Employee Name]
Address: [Employee Address]
Subject: Important Information Regarding Your Right to Continue Health Coverage
Dear [Employee Name],
This notice is to inform you of your right to continue your health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This right arises because of a qualifying event, specifically [Qualifying Event - e.g., termination of employment].
As a result of this qualifying event, you and your qualified beneficiaries (if any) may elect to continue your health coverage under [Name of Group Health Plan].
Who is a Qualified Beneficiary?
A qualified beneficiary includes the covered employee, the employee's spouse, and the employee's dependent children who were covered under the group health plan on the day before the qualifying event.
Coverage Available
You and your qualified beneficiaries may elect to continue the same health coverage you had under the plan immediately before the qualifying event. This includes medical, dental, and vision coverage, if applicable.
How Long Coverage Lasts
If you elect COBRA continuation coverage, it will begin on [Date Coverage Begins - usually the day after your coverage ended]. The maximum period of coverage is [Number] months from the date of the qualifying event. Coverage may end earlier if:
* You fail to pay premiums on time.
* The employer ceases to maintain any group health plan.
* You become covered under another group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of such beneficiary.
* You become entitled to Medicare benefits.
Cost of Coverage
The monthly premium for COBRA continuation coverage is $[Amount] for individual coverage and $[Amount] for family coverage. This represents the full cost of the coverage, including both the employer's and employee's share, plus a 2% administrative fee.
How to Elect Coverage
To elect COBRA continuation coverage, you must complete and return the enclosed election form to [Name of Plan Administrator/Contact Person] at [Address] by [Election Deadline - usually 60 days from the date of this notice or the date your coverage ended, whichever is later].
Payment Information
If you elect COBRA continuation coverage, your first payment is due within 45 days after the date of your election. Subsequent payments are due on the [Day] of each month. Payments should be made payable to [Name of Payer] and mailed to [Payment Address].
Important Information
* Please read the enclosed COBRA election form and information carefully.
* You have the right to elect COBRA continuation coverage even if you have other health insurance coverage.
* If you have any questions, please contact [Name of Plan Administrator/Contact Person] at [Phone Number] or [Email Address].
Sincerely,
[Name of Plan Administrator/Contact Person]
[Title]
Sample COBRA Election Form (Enclosed with Notification)
[Employer/Plan Administrator Letterhead]
COBRA Continuation Coverage Election Form
Instructions: Please complete this form and return it to [Name of Plan Administrator/Contact Person] at [Address] by [Election Deadline].
Part 1: Employee Information
* Name of Employee: [Employee Name]
* Social Security Number: [Employee SSN]
* Address: [Employee Address]
* Date of Qualifying Event: [Date]
Part 2: Qualified Beneficiary Information
Please list all qualified beneficiaries who wish to elect COBRA continuation coverage.
| Name | Relationship to Employee | Date of Birth | Electing Coverage? (Yes/No) |
|---|---|---|---|
| [Name] | [Relationship] | [DOB] | [Yes/No] |
| [Name] | [Relationship] | [DOB] | [Yes/No] |
| [Name] | [Relationship] | [DOB] | [Yes/No] |
Part 3: Election of Coverage
I/We elect to continue health coverage under the [Name of Group Health Plan] as described in the COBRA notification letter. I understand that I am responsible for paying the full cost of coverage, including the employer and employee portions, plus a 2% administrative fee.
Part 4: Signature
Signature of Employee: ____________________________ Date: ____________
Important Information:
* Please retain a copy of this form for your records.
* Failure to return this form by the election deadline will result in a loss of your right to elect COBRA continuation coverage.
Sample COBRA Payment Reminder Notice
[Employer/Plan Administrator Letterhead]
Date: [Date]
To: [COBRA Beneficiary Name]
Address: [COBRA Beneficiary Address]
Subject: COBRA Payment Reminder
Dear [COBRA Beneficiary Name],
This letter is a reminder that your COBRA premium payment for [Month, Year] is due on [Due Date]. The amount due is $[Amount].
Please make your payment payable to [Name of Payer] and mail it to [Payment Address].
Important Information:
* Failure to make your payment by the due date may result in a lapse in your COBRA coverage.
* If you have already made your payment, please disregard this notice.
* If you have any questions, please contact [Name of Plan Administrator/Contact Person] at [Phone Number] or [Email Address].
Sincerely,
[Name of Plan Administrator/Contact Person]
[Title]
Sample COBRA Termination Notice
[Employer/Plan Administrator Letterhead]
Date: [Date]
To: [COBRA Beneficiary Name]
Address: [COBRA Beneficiary Address]
Subject: Termination of COBRA Continuation Coverage
Dear [COBRA Beneficiary Name],
This letter is to inform you that your COBRA continuation coverage under the [Name of Group Health Plan] will terminate effective [Termination Date].
The reason for this termination is [Reason for Termination - e.g., failure to pay premiums, you became covered under another group health plan, you became entitled to Medicare].
Important Information:
* You may have the right to convert to an individual health insurance policy. Please contact your insurance carrier directly for more information.
* You may also be eligible for coverage through the Health Insurance Marketplace (healthcare.gov).
* If you have any questions, please contact [Name of Plan Administrator/Contact Person] at [Phone Number] or [Email Address].
Sincerely,
[Name of Plan Administrator/Contact Person]
[Title]
COBRA is a vital safety net that allows you to maintain health coverage during times of transition. By understanding your rights and the specific requirements of your employer’s plan, you can make informed decisions about your healthcare needs. Carefully review all COBRA notices, meet deadlines, and seek clarification when needed to avoid disruptions in coverage.