Extending Group Insurance
A federal law known as COBRA protects some people who are about to lose employee group health insurance. Those covered by the law can continue group coverage for a certain time at their own expense. This is much less costly than buying an individual policy. The law generally covers group health plans maintained by employers with 20 or more employees in the prior year.
Among those affected are:
- employees who leave their jobs or who are laid off
- full-time employees whose hours are reduced to part-time so that they become ineligible for benefits
- early retirees
- widows or widowers of the insured
- recent ex-spouses of the insured
- young people who become too old to be covered under their parents' plans.
Generally speaking, this law allows the employee or eligible family members to keep the insurance for 18 months after leaving a job. A child who becomes too old to be covered on the parent's policy can be covered for 36 months. The insured pays group rates plus a small surcharge. Usually this is still cheaper than buying a new individual policy. Also, group policies often offer better coverage than individual plans.
The coverage ends if the insured person doesn't pay the premium. It also ends if the insured person gets other coverage, for instance, through a new job. If a person has extended his health coverage with COBRA, so that there has not been a break of more than 63 days in coverage, he or she will not have to worry about any pre-existing condition clause when beginning a new policy. He or she will be considered to have already met the pre-existing condition requirements for the new policy.
If your former employer drops the group policy or has too few people on the policy, you can’t extend your coverage with COBRA.
There is a limited time to request extending these group rates. Once a person loses coverage, he or she will not be able to apply for an extension. Therefore, you must be aware of deadlines and be sure employers file any needed information. Insurance companies must be told about any changes such as marriage, divorce, or a child reaching the age limit.
You may find it helpful to talk to your HTC social worker before making changes in employment. The social worker can help you figure out the COBRA program and how the change in jobs might affect your insurance.
If you have group health insurance, you may be able to convert it to an individual policy when you leave your job. Information about this will be in the group insurance policy rules. You can also get information about conversion from your company’s Human Resources department.