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COBRA Coverage in Indiana

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Is COBRA coverage available for former full time employees in Indiana?

COBRA is the Consolidated Omnibus Budget Reconciliation Act which was passed by Congress in 1986. The law is designed to allow former employees to keep health care benefits for a temporary period of time. 

There are certain qualifying events that must occur for an employee to be eligible.An employee can select COBRA benefits when he or she is terminated from a job.  An employee can also qualify if their hours are reduced disqualifying them from receiving group health care benefits.  Spouses qualify the same way a covered employee does but they can also qualify if the covered spouse dies or they are divorced from the covered employee.

Employers must have 20 or more employee and offer group health care coverage to offer COBRA benefits.  Full time and part time employees are used in the eligibility calculation.

COBRA benefits are valid for 18 months unless there is a second qualifying event like disability, divorce, legal separation or death of the covered employee. Proof of the second qualifying event must be provided to the plan administrator.

When the employee or beneficiary qualifies the personnel office must notify the plan administrator that a qualifying event has occurred.  This notification must be completed within 30 days of the event.  Then the employee must receive notification from the personnel office within 14 days of notifying the plan administrator.  The employee or beneficiary has 60 days to choose COBRA coverage.  The first premium payment must be made within 45 days to continue coverage.

The employee is responsible for paying the total premium.  This can be more expensive than their previous coverage which was partially sponsored by the employer.  However, it is less expensive than individual coverage.

Employees that are on FMLA (Family Medical Leave Act) are not eligible for COBRA benefits. Their employer sponsored health care continues and the employee makes their normal monthly premium payment.

The employee on COBRA must continue to make premium payments to keep coverage.  If the employee is hired at another company and receives health care benefits, the COBRA coverage will be cancelled.GW