The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that requires employers with 20 or more employees to give employees who leave their jobs and their eligible family members the option to continue health insurance coverage under the employer's group health insurance plan. Many states also have laws, sometimes called mini-COBRA laws, that extend COBRA coverage to include employers with fewer than 20 employees. However, Washington State does not have a mini-COBRA law, so all COBRA in Washington is regulated by federal law.
Coverage
COBRA coverage is available to employees who leave a job for any reason except being fired for gross misconduct and to employees who have their hours reduced to a point where they lose employer-paid health insurance coverage. Not only can spouses and dependent children covered by the employer's health insurance also obtain COBRA coverage when an employee leaves a job, they are also eligible for COBRA if the employee becomes entitled to Medicare, in the event of a divorce or legal separation or if the employee dies. Additionally, dependent children can obtain COBRA coverage when they lose dependent child status.
Cost
The cost of COBRA coverage is typically 100 percent of the group plan rate plus a 2 percent administrative fee. COBRA coverage is usually available for 18 months, although in some situations, coverage can be for up to 36 months.
Continuation Coverage
Although Washington doesn't have a mini-COBRA law, the state does require that health insurance companies give all employers the option to set up a continuation option for employees. However, employers are not required to do so. Continuation means that employees can continue coverage under the group health insurance plan, provided they pay the premiums. COBRA is a type of continuation coverage.
Conversion Policies
Conversion policies, which are available in some states, are not available in Washington. Health insurance conversion policies, offered by some group health insurance plans, are guaranteed-acceptance individual health insurance policies purchased from the same insurance company that covered employees under their former group health insurance plan.
Considerations
If a person loses his employer-paid health insurance, is not eligible for COBRA or another continuation health insurance policy and cannot get individual medical insurance due to a pre-existing condition, Washington has a state high-risk health pool for which the person can apply.
Tags: COBRA coverage, health insurance, health insurance, group health, group health insurance, health insurance plan, insurance plan
