OnlineAdviserCOBRAplan.com

Who is entitled to benefits under COBRA? Who is entitled to COBRA alternative coverage?

There are three elements to qualifying for COBRA benefits:

  • plan coverage
  • beneficiaries
  • qualifying events

Each of the three eligibility requirements is discussed below. Keep in mind that all three of the criteria must be met before an individual qualifies for COBRA continuation insurance.

Plan Coverage - Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA. Employees of smaller businesses are not eligible for COBRA coverage. Both full and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

Beneficiaries - A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee's spouse, or an employee's dependent child. In certain cases, a retired employee, the retired employee's spouse, and the retired employee's dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage is considered a qualified beneficiary. Agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries.

Qualifying Events - Qualifying events are certain events that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. 

Qualifying Events for Employees:

  • Voluntary or involuntary termination of employment for reasons other than gross misconduct
  • Reduction in the number of hours of employment

Qualifying Events for Spouses:

  • Voluntary or involuntary termination of the covered employee's employment for any reason other than gross misconduct
  • Reduction in the hours worked by the covered employee,
  • Covered employee's becoming entitled to Medicare
  • Divorce or legal separation of the covered employee
  • Death of the covered employee

Qualifying Events for Dependent Children:

  • Loss of dependent child status under the plan rules
  • Voluntary or involuntary termination of the covered employee's employment for any reason other than gross misconduct
  • Reduction in the hours worked by the covered employee
  • Covered employee's becoming entitled to Medicare
  • Divorce or legal separation of the covered employee
  • Death of the covered employee

COBRA alternative coverage has no universal entitlement or eligibility requirements. Individuals are eligible for some COBRA alternative plans regardless of employment status, legal status, or prior insurance coverage. Some COBRA alternative health insurance plans have their own strict eligibility requirements based on location of residence, age, health history and sometimes other factors that are not related to COBRA laws.  Other COBRA alternative insurance plans offer "universal eligibility" which means that the insurance is available to all individuals residing in the state who are under the Medicare eligibility age.

revised 4/21/09

(back to index of frequently asked questions about COBRA coverage)

 

COBRAplan.com provides help with COBRA issues

COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.