You may be able to keep your health insurance through COBRA.
COBRA is the Consolidated Omnibus Budget Reconciliation Act (COBRA), a federal law, that gives employees who have lost their group health insurance the option of continuing it for a limited period of time. Employees' spouses and dependent children are also eligible for continued health benefits. COBRA requires that employers with 20 or more employees offer the temporary continuation of coverage.The law varies in each state, and, in Illinois, qualified individuals may be eligible for up to 36 months of extended coverage.
COBRA Eligibility
If you are terminated from employment (other than for gross misconduct), receive a reduction in work hours or notify your employer that you will not be returning from Family and Medical Leave, you are eligible for COBRA coverage.
You are also eligible for COBRA coverage if your spouse is terminated from employment (other than gross misconduct), receives a reduction in work hours, dies or if your spouse voluntarily terminates group coverage and enrolls in Medicare. Divorce or legal separation from your spouse are two other life changes that make you eligible for continued coverage.
Dependent children are eligible for the same reason as spouses or for losing dependent child status due to reaching the maximum age, getting married or completing school.
COBRA Benefits
Continued coverage under COBRA means employers are required to allow you and/or your qualifying dependents to continue coverage under the employers plan at the group rate. However, you will pay for that coverage yourself. Many people use this coverage until they can find another job with health insurance benefits or when they will not qualify for individual coverage due to a pre-existing condition.
Illinois Eligibility
To be eligible for COBRA in Illinois, you, as an employee, your spouse or your dependent child had to have been covered under your employer's health plan the day before your work status changed. If you have or adopt a child during a period of COBRA coverage, your child is also eligible for COBRA--if you enroll the child at birth or adoption.
Spouses must notify their health insurance plan administrator within 60 days of a divorce or legal separation from an employee; employees or dependent children must notify the administrator within 60 days of a child ceasing to be covered as a dependent.
Continuation of Coverage
COBRA eligibility extends for 18 months beyond the date your employment was terminated or your hours were reduced. However, if you or your covered dependents become disabled within 60 days of COBRA election, your coverage can continue for a maximum of 29 months. A divorced or legally separated spouse of an employee and his dependents can receive a maximum of 36 months of coverage. The death of an employee also allows for 36 months of coverage for the spouse and dependent children.
Your spouse and dependent children are entitled to 36 months of coverage after the date on which you become eligible for Medicare, but if your employment ends or your hours are reduced during this time, your spouse and dependent children are only entitled to 18 months of coverage (29 months if there is a disability extension).
Dependent children who lose their dependent child status are entitled to 36 months of coverage.
Cost
Your COBRA premiums should not exceed 102 percent of the group rate for your employer's coverage. Cost is 100 percent, as you will be paying the employee portion and the employer portion; 2 percent of the cost is for administrative fees. The plan may charge 150 percent after 18 months of coverage if you are granted an 11 month disability extension.
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