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ANSWER: You are wise to think ahead about your health insurance coverage and to learn more about this option. COBRA, the Consolidated Omnibus Budget Reconciliation Act, gives workers who lose their health benefits the right to choose to continue group health benefits provided by their plan under certain circumstances. The law is enforced by the Departments of Labor and Treasury, for private-sector health group health plans, and the Department of Health and Human Services for public-sector health plans.
Your husband’s employer will send an election notice within 14 days after his last day on the health insurance plan. You will then have 60 days to decide whether to elect COBRA continuation coverage. You then have 45 days after electing coverage to pay the initial premium. The premiums are not cheap! Expect to pay the total premium (the employer + employee contribution) plus 2% for administration. Also, another important note is that the premiums are not tax deductible, like they are when they are deducted from payroll.
A little more about COBRA
There are several events that can trigger COBRA eligibility, including-
- Voluntary or involuntary termination of the covered employee’s employment for reasons other than gross misconduct
- Reduced hours of work for the covered employee
- Covered employee becoming entitled to Medicare
- Divorce or legal separation of a covered employee
- Death of a covered employee
- Loss of status as a dependent child under plan rules
Under COBRA, the employee or family member may qualify to keep their group health plan benefits for a set period of time, depending on the reason for losing the health coverage. The following represents some basic information on periods of continuation coverage:
|
Qualified Beneficiary |
Qualifying Event |
Period of Coverage |
|
Employee
Spouse
Dependent child |
Termination
Reduced hours |
18 months * |
|
Spouse
Dependent child |
Entitled to Medicare
Divorce or legal separation
Death of covered employee |
36 months |
|
Dependent child |
Loss of dependent child status |
36 months |
*This 18-month period may be extended for all qualified beneficiaries if certain conditions are met in cases where a qualified beneficiary is determined to be disabled for purposes of COBRA.
QUESTION: Our health insurance is a self insured insurance plan through my wife’s employer. I have been receiving IVIG treatments for the past three years from the same insurance company and now they are saying that IVIG is experimental. I do not understand. Since my wife’s employer administers the plan, I was told that I cannot appeal to the Insurance Commissioner. Now what?
ANSWER: A “self insured” insurance plan means that instead of paying health insurance premiums to an insurance company, the employer sets a pool of funds in a reserve and pays the employees claims out of this money. They typically contract with either a third-party administrator or a health plan to administer the benefits and adjudicate the claims. Many employees of companies do not even realize that their plan is self-funded by their employer. Self-funded plans are regulated federally by the Department of Labor under the Employee Retirement Income Security Act of 1974 (ERISA), so they are sometimes known as ERISA plans.
ERISA requires plans to-
- provide participants with plan information, including important information about plan features and funding
- provide fiduciary responsibilities for those who manage and control plan assets
- establish a grievance and appeals process for participants to get benefits from their plans
- give participants the right to sue for benefits and breaches of fiduciary duty
For additional information, go to http://www.dol.gov/dol/topic/health-plans/erisa.htm
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