COBRA
COBRA Checklist
You must be registered for web enrollment to access the COBRA Election Form and the COBRA Qualifying Event Notice. If you are not registered, contact OSEEGIB Member Services to have these forms sent to you.
The employee’s file should contain the General Notice of COBRA Continuation Coverage Rights that was provided to them at the time of employment. (See Enrollment)
When you receive notice of an employee’s and/or dependent’s COBRA qualifying event:
Complete either the Insurance Change Form or Insurance Termination Form, whichever is appropriate.
Input the change in Web Enrollment or mail the form to OSEEGIB.
Complete the COBRA Qualifying Event Notice and keep a copy in the employee’s file. Send OSEEGIB a copy with the COBRA Election Form only if the member elects COBRA.
Within 14 days, you must mail a COBRA Packet to the last known mailing address on file by first class mail. The packet must be addressed to all covered individuals; e.g., John and Mary Smith and Children. If the covered dependents do not live with the employee, a separate COBRA Packet must be mailed to each dependent.
Keep a mailing log of all COBRA materials.
If the mailed COBRA Packet is returned as non-deliverable, check your records for an updated address and remail. If no updated address is available, keep proof of the returned packet in the employee’s file. If a new mailing address becomes available, remail the original packet and log the information.
If a COBRA eligible employee or dependent (qualified beneficiary or QB) returns the COBRA Election Form, verify it is still within the 60-day eligibility date. Keep a copy of all forms in the employee’s file.
If the QB sends non-cash premium payment with the COBRA Election Form, make a photocopy of the payment and keep it in the employee’s file. Do not send COBRA payments with your employer’s monthly payment.
Attach the COBRA Qualifying Event Notice to the COBRA Election Form and fax or mail it to OSEEGIB. Any premium payments must be mailed.
What Is COBRA?
In response to concerns regarding the loss of employer sponsored group health, dental, and/or vision insurance, Congress set rules that allow qualified employees and dependents to continue group insurance under certain conditions and for limited periods of time. These rules can be found in Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly referred to as COBRA.
The term “COBRA” actually refers to a type of member eligibility status and not a particular plan. When an employee and/or eligible dependents qualify to continue coverage under COBRA, they can continue health, dental, and/or vision coverage for a limited time period.
Federal COBRA rules state that the option to continue coverage under COBRA must be offered to all Qualified Beneficiaries (QBs) enrolled in health, dental, and/or vision insurance coverage when employment is terminated or a dependent loses eligibility due to a qualifying event. The COBRA option must always be offered regardless of other insurance options that are available.
QBs can continue coverage under COBRA until they:
- Get other group insurance coverage that has no preexisting conditions, limitations, or exclusions
- Cancel the COBRA coverage
- Exhaust the coverage continuation period
COBRA coverage can be canceled for non-payment of premiums.
An employee is eligible to continue coverage under COBRA if they have insurance coverage at least one day before a qualifying event occurs.
COBRA Packet
The COBRA Packet should include:
- An Eligibility for Continuation of Coverage form
- A copy of Important Information About Your COBRA Continuation Coverage Rights
- A copy of the COBRA premium rates
- A COBRA Election Form
The most up-to-date versions of COBRA forms are available on the IC page of the OSEEGIB website. To access the COBRA Election Form and the COBRA Qualifying Event Notice, log into the Web Enrollment System. If you are not registered for the Web Enrollment System, contact OSEEGIB Member Services to have these forms mailed, emailed, or faxed to you.
If a dependent does not reside with the employee and they lose eligibility, a packet must be sent to the dependent’s last known address. Be aware that failure to notify an employee’s spouse or former spouse of their COBRA rights is a common and costly mistake.
Even if a QB is eligible to retire or vest, you must always mail a COBRA Packet to all qualified beneficiaries; however, in the case of an employee who chooses to retire or vest, instruct them to disregard the COBRA Packet and instead complete an Application for Retiree/Vested/Non-Vest/Defer Insurance. A retired/vested member can continue health, dental, vision, and/or life insurance coverage indefinitely.
If a COBRA Packet is returned for an incorrect address and you can locate the QB’s new address, mail a copy of the original packet (do not re-date) within the 60-day COBRA period and document the date it is re-mailed. If no other address is available or the packet is again returned, attach the returned mail forms to the COBRA Qualifying Event Notice. Keep the returned COBRA Packet on file.
Coverage Options for COBRA Participants
Electing COBRA is not a qualifying event and does not allow a change in plans. The exception to this rule is an employee who moves out of the service area of their health plan. These employees are defaulted into the HealthChoice High. Plan changes can be made during the annual Option Period.
An employee can continue health, dental, and/or vision coverage in effect at termination of employment.
If an employee was not enrolled in vision coverage, that option can be added during the next annual Option Period.
Effective Dates of COBRA Coverage
COBRA continuation coverage does not become effective until OSEEGIB receives the first premium payment. The process can be expedited by sending the first month’s premium payment and a copy of their COBRA Election Form directly to OSEEGIB.
Length of COBRA Coverage Periods
A COBRA continuation period of up to 18 months is available to employees and/or dependents who lose coverage due to one of the following qualifying events:
- Termination of employment, whether voluntary or involuntary (except for gross misconduct)
- Reduction in hours resulting in the loss of eligibility for coverage
- Leave of absence
- Reduction in Force (RIF)/strike/layoff
A COBRA continuation period of up to 36 months is available to dependents who lose coverage due to one of the following qualifying events:
- Divorce or legal separation
- Dependent child turns 26
- Employee’s Medicare eligibility (in limited circumstances)
- Employee’s death*
*Dependents are also eligible to continue insurance coverage in effect at the time of an employee’s death under Survivors’ Rights. (See Eligibility and Enrollment)
A COBRA continuation period of up to 36 months is available to dependents who are covered through an approved Application for Coverage for Other Dependent Children, guardianship, or a tax return showing dependency. Coverage must be lost due to one of the following qualifying events:
- They turn age 26
- They marry
- They no longer reside with the member
- They are no longer financially dependent on the member
A dependent who loses eligibility can continue coverage under COBRA until they reach the end of eligibility.
If a dependent child marries while on COBRA, they can add their new spouse and/or dependents to COBRA coverage within 30 days of their marriage, but only for the remainder of their established continuation period.
If a 36-month event occurs during an 18-month COBRA continuation period, a dependent QB can extend eligibility for a maximum of 36 months from the date of the original qualifying event. For example, an employee and spouse divorce during their 17th month of COBRA coverage. The former spouse and covered dependents are eligible to continue coverage for an additional 19 months, not to exceed a 36 month continuation period.
Loss of dependent coverage due to an employee’s termination is not a 36-month qualifying event.
Coverage can be extended for up to 29 months for QBs who qualify for Social Security Disability benefits. Individuals must be disabled at the time of the qualifying event, or become disabled within 60 days of the start of their COBRA continuation period. All covered QBs can continue coverage for up to 29 months or until Medicare coverage becomes effective, whichever is earlier.
QBs must notify OSEEGIB within 30 days of a Social Security Disability determination, or if they are determined to be no longer disabled. This determination will reduce the COBRA continuation period.
Each QB has the right to elect to continue coverage under COBRA and elect separate benefit options; i.e., an employee may elect to keep health and dental coverage under COBRA while their spouse may elect to keep only health coverage.
A QB is eligible to continue only the coverage they had in effect the day before the qualifying event. COBRA eligibility does not allow a QB to add benefits or change plans. A coverage or plan change can only be made during the annual Option Period.
When a QB gains other group health, dental, and/or vision insurance that does not apply preexisting conditions, limitations, or exclusions, COBRA coverage for that benefit must be terminated.
When a QB’s COBRA continuation period expires, they must seek insurance coverage elsewhere unless they can be insured as a dependent on a primary member’s plan through OSEEGIB.
QBs who are Medicare eligible or become Medicare eligible have different rules that apply:
- A QB who is Medicare eligible can still continue coverage under COBRA.
- A QB who becomes Medicare eligible during a COBRA continuation period must terminate health coverage the date Medicare coverage becomes effective. Dental and/or vision coverage can be continued for the remainder of the COBRA continuation period.
Note: COBRA coverage must be continuous from the date active coverage ends. No lapse in coverage is allowed.
Note: In the event a retiring or vesting employee elects COBRA, they forfeit their right to continue insurance coverage through OSEEGIB. When the COBRA continuation period ends, they are not eligible to continue further coverage through OSEEGIB.
Timeline for COBRA Enrollment
Importance of Documenting the COBRA Process
At initial employment and at the time an employee and/or their dependents first become eligible for coverage through your employer, you are responsible for providing them notification of their rights under COBRA. The General Notice of COBRA Continuation Coverage Rights form should be sent by first-class mail to a new employee and spouse, and a copy, signed by the employee and spouse, should be kept in your personnel file.
You are also required to complete various forms, meet numerous notification guidelines, and keep accurate records of the COBRA notification and enrollment processes. You are responsible for sending a COBRA Packet to a QB who becomes ineligible for insurance coverage.
COBRA Premiums
COBRA premiums include the categories of Member, Spouse, Child, and Children.
All premiums from the effective date of COBRA coverage through the current month of coverage are due in full within 45 days of the QB’s signature on the COBRA Election Form.
It is the policy of the Oklahoma State and Education Employees Group Insurance Board that for any benefit continued under COBRA, one person must always pay the primary member premium. In cases where a spouse, child, or children are insured under a particular benefit and the member did not retain that coverage, one person is always billed the primary member rate.
Once COBRA continuation coverage is in effect, a Premium Notice is mailed to QBs the first week of each month, and payment is due by the 20th of that month. Partial payments are not accepted. Premiums can be paid by check, bank draft, or money order. Premiums for a COBRA dependent cannot be deducted from a current employee’s payroll check.
If a COBRA participant does not receive a Premium Notice in a timely manner, they should contact OSEEGIB. They must not assume that no premiums are due.
Checks returned for insufficient funds will result in the termination of COBRA coverage.
More Information About COBRA
Employees and/or dependents are not required to enroll in COBRA. It is up to each QB to decide if continuing coverage under COBRA is the right option for them.
New Employers
When your employer enrolls with OSEEGIB or merges with an OSEEGIB participating employer, you must use a COBRA to COBRA Form to enroll QBs who already participate in COBRA through a previous employer. Complete this form and include the QB’s name and Social Security number, as well as the effective date and end date of the original COBRA continuation period. COBRA to COBRA QBs can only continue coverage for the remainder of the original continuation period; e.g., a QB received 12 months of COBRA coverage before enrollment through OSEEGIB; since their continuation period was 18 months, there are still six months of continuation coverage remaining.
Terminating Employers
If your employer terminates its group coverage through OSEEGIB, QBs must be offered COBRA coverage continuation through its new carrier. All coverage through OSEEGIB, including coverage for COBRA members, ends on your employer’s last day of coverage with OSEEGIB.
Last Modified on 03/13/2013