Michigan residents can benefit from federal COBRA law provisions.
A federal law known as the 1986 Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows many workers to retain their health benefits for a set period after they lose their jobs or in other specific circumstances.
Some states have similar provisions for smaller companies, or provisions that allow extension of federal COBRA benefits for longer periods. However, Michigan does not have any such laws. Still, Michigan residents can benefit from the key provisions of the federal law.
Who Is Eliglble
Federal COBRA law allows an employee leaving a job, for any reason other than gross negligence, to retain group health benefits for a period typically up to 18 months. Benefits for dependents can also be extended under COBRA. The law also allows for an extension of benefits in cases of reduction in work hours, divorce, or certain other events that affect health benefits. Sometimes, such as in cases of divorce from the covered employee, the benefits can be extended for up to 36 months.
The federal law applies only to employees in private, state, or local government workplaces with 20 or more workers. Eligible employees must have already been enrolled in their workplace's health plan.
COBRA Costs
Health coverage under COBRA is usually considerably more expensive than the cost a person paid while receiving health benefits directly from an employer. That's because employers typically pay a portion of the health insurance premium.
However, under federal law, people who are eligible for COBRA can be required to pay 102 percent of the premium cost--with the extra 2 percent allowed for administrative expenses.
Get COBRA Coverage
Employees who are laid off or have their work hours reduced should ask about COBRA benefits at the time of the job change. Employers are required to notify COBRA health plan administrators within 30 days of an event that qualifies an employee or dependent for COBRA coverage.
People eligible for COBRA coverage should receive a notice allowing them to elect coverage within the next 14 days. That notice allows an additional 60 days to decide whether to elect coverage and 45 days from the election date to pay the first premium.
Eligible employees or dependents are required to notify the plan administrator within 60 days of a change in family circumstance, such as divorce, which would trigger COBRA eligibility.
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