Pre-enrollment. Thinking about electing COBRA?

Information on COBRA and CMS

1. What is COBRA continuation coverage

COBRA is not an insurance company nor is it health insurance. COBRA is an abbreviation for a federal regulation that governs how and when a “qualified beneficiary” can continue terminated group health insurance coverage for a specified period of time by self-paying the premium. Your COBRA Election Notice includes all of the dates, deadlines, and rules for making an election.

2. Who is entitled to COBRA continuation coverage

Employees, covered spouses or covered children all have rights to continue coverage under the COBRA continuation coverage rules. Each “qualified beneficiary” in your family group who is listed on the Election Form has an independent right to elect COBRA continuation coverage. This means that they can pick and choose between the available COBRA plans or decline COBRA continuation coverage in its entirety. Your COBRA Election Notice includes all of the dates, deadlines, and rules for making an election. If the information does not look right to you, please contact us.

COBRA Enrollment and Effective Date

3. Am I required to enroll in COBRA continuation coverage

COBRA is a right but it is optional and, until you make an election and pay your initial premium, your health coverage has been terminated.

4. When does COBRA continuation coverage start

COBRA is always effective the day after your active coverage ends. For most, active coverage terminates at the end of a month and COBRA is effective on the first day of the next month.

5. Can I decide when to start COBRA continuation coverage

No. The COBRA effective date is always the day after your active coverage ends. There cannot be a gap in coverage.

6. Can I start and stop COBRA continuation coverage

No. You cannot start and stop COBRA and you cannot skip any months. COBRA is always effective on the day after your active coverage ends and is continuous until terminated.

7. Can I terminate COBRA continuation coverage

Yes. You can terminate COBRA continuation coverage in its entirety or just certain plans. Each enrolled qualified beneficiary can make that decision independent of any other enrolled qualified beneficiary.

8. What if I don’t want COBRA continuation coverage

If you don’t want to enroll in COBRA continuation coverage, simply do not return the form. You don’t need to notify us. If you do waive COBRA continuation coverage, there are special rules if you should change your mind before the end of your “election period”. Contact us for information.

9. What if some family members want COBRA and other don’t want COBRA

Because each “qualified beneficiary” has an independent right to COBRA, qualified family members can make their own election and plan decisions. If someone in your family group doesn’t want COBRA but others do want COBRA, you will complete the Election Form appropriately. The Election Form has detailed instructions on it but, if you have any questions, please let us know.

10. What happens after I return my Election Form and initial premium

We will make certain the Election Form is completed correctly and the required deadlines have been met. We will review your initial premium to make sure it’s the correct amount and has been timely received. If everything is in order, the reinstatement process will start. If you want to shorten the period of time between coverage termination and reinstatement, return your Election Form and pay your initial premium as soon as possible.

11. Can I wait to make my initial premium payment

Yes but it will delay coverage reinstatement. The COBRA rules allow you to make an election by returning your Election Form and, then, waiting up to an additional 45 days to make the initial premium payment. The deadline for returning the election form is on your Election Notice. You must pay your initial premium in order for the coverage reinstatement process to begin. If you want to shorten the period of time between coverage termination and reinstatement, return your Election Form and pay your initial premium as soon as possible.

12. What is the initial premium amount

See COBRA Premiums.

13. Is coverage reinstated immediately

No. There is a processing lag time and it can take a total of 3-4 weeks for your health insurance companies to update their records. In the meantime, your coverage is still terminated and your healthcare provider may ask for payment for any services rendered. Once your coverage is reinstated, you can file a claim for reimbursement.

14. Will I be able to make changes to my plan elections in the future

Yes. Once COBRA continuation coverage is elected and the 60 day election period has passed, you can drop a plan at any time. But, to change between plans or add new plans, you may need to wait until open enrollment. If you acquire a new dependent, you have the same rights as an active employee to add new dependents. Those rules are in your plan booklet or summary plan description.

Health Plan Coverage

15. Is COBRA Management Services my new insurance carrier

No. CMS is an administration company that your employer has hired to issue notices, answer questions, receive elections, collect premiums, and handle all COBRA related matters for them. We do not work for the insurance company that provides your health coverage. We do not process or pay your claims or issue ID cards. We do coordinate eligibility, however, and any problems should be directed to our attention.

16. Has my health coverage been terminated

Yes, until you make your election and pay your initial premium your health coverage has been terminated as of the date on the summary page of your Election Notice. COBRA is a right but it is optional and you must be an election and pay your initial premium. Your COBRA Election Notice includes all of the dates, deadlines, and rules for making an election.

17. Will my health plan coverage and deductibles stay the same

Yes, your coverage will stay the same for the plan(s) that you elect. It will be as if you never lost coverage. That includes full credit for any deductibles that have been satisfied, plan maximums, etc. Once again, it’s as if you never lost coverage. If, however, the employer sponsoring the plan makes a change, you will be treated the same as an active employee and your benefits will change, too.

18. What if I have to use my health plan or get a prescription filled

You can still see your healthcare provider or get a prescription filled. But, until your coverage has been fully reinstated, you may have to make payment at the time of service and file a claim after your coverage is reinstated. Check with your insurance carriers for information on how they handle claim filings.

19. What if my employer adds a totally new plan

You will have the same rights as an active employee to elect any new plans that are added. For example, if dental coverage is added for the first time, all COBRA participants will have the opportunity to elect it.

20. How can I avoid a lapse in coverage

By returning your election form and paying your initial premium as soon as possible, you will minimize the delay in coverage reinstatement.

COBRA Premiums

21. Difference in active cost and COBRA cost

The monthly premium cost can come as a surprise. In many instances, the employer sponsoring the plans was paying all or a portion of the cost for you. Now, because you are no longer entitled to coverage under the employer’s plan, you have to pay the full cost of coverage plus a 2% administrative fee.

22. Who determines the premium cost

The insurance company determines the premium cost. Or, if the employer is self-insured, the cost is determined through an actuarial evaluation. You are paying the same amount as the total cost for similarly situated active employees and their dependents.

23. What is the initial premium amount and how is it determined

It is determined by your final COBRA plan elections. Once you have made your elections on the Election Form, add up the monthly premium amount that is due. You will owe that amount for all past full months of coverage. Under the COBRA rules, the current month is due before the end of the 30 day grace period. For example, if your last full day of coverage was December 31^st and COBRA is effective on January 1, you will owe for the months of January and February if you are making your election on March 15^th. The March premium is due before the end of March’s 30 day grace period.

24. What if I want COBRA for only one or two months

You will adjust your initial premium accordingly. Using the example in the prior question, if you want coverage for January only, that would be your initial (and final) premium payment. If you only want coverage for January and February, that would be your initial (and final) premium payment.

25. Can someone else pay my premium

Yes. Any one can pay your premium for you including a relative or a new employer. In order for us to credit the payment to your “account”, please make sure they put your name and the employer’s name on the monetary instrument. There will be full instructions on the Payment Instructions you will receive after returning your Election Form. If there are any questions, please contact us.

26. When will I receive a bill

Once your election is received, you will receive a packet from us detailing the payment process.

27. ID Cards

In most instances, your old card will still work after you have been reinstated. CMS does not issue the ID cards. If you have a question regarding your ID card, contact your insurer.