Cobra and HIPAA Information
New Model Cobra Election Notice Released
A revised Model COBRA Election Notice Model COBRA Election Notice is now available for group health plans subject to federal COBRA to inform eligible employees and dependents of the right to continue coverage and how to make an election when a qualifying event occurs.
COBRA generally requires plan administrators to provide eligible individuals (called ‘qualified beneficiaries’) an election notice within 14 days after receiving notice of a qualifying event. The updated model notice includes additional information for qualified beneficiaries who may want to consider and compare health coverage alternatives to COBRA that will be available through the Health Insurance Exchanges (Marketplaces), which are expected to begin operating in 2014.
Federal law generally requires employers with group health plans to offer employees and their spouses and dependents a temporary period of continued health care coverage if their employer-provided coverage should cease. These continuation requirements are commonly referred to as COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985). In general, employers must offer coverage for a period of up to:
- 18 months for covered employees, as well as their spouses and dependents, when health plan coverage is lost due to termination or a reduction of hours.
- 36 months for spouses and dependents who lose coverage due to divorce or legal separation, the employee’s death, or another specified “qualifying event.”
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- voluntary or involuntary termination of the employee’s employment for reasons other than “gross misconduct”;
- reduced hours of work for the employee;
- eligibility for Medicare coverage for the employee;
- divorce or legal separation of a covered employee;
- death of a covered employee; or
- loss of status as a “dependent child” under plan rules.
Under COBRA, the affected employee or family member may qualify to keep their group health plan benefits for a set period of time, depending on the reason for losing the health coverage. The following represents a basic overview of some basic information on periods of continuation coverage. These qualifying events are also discussed in more detail under “What are Qualifying Events”:
Employee, Spouse, Dependent child
Termination or Reduced hours
Period of Coverage
The Health Insurance Portability and Accountability Act of 1996, known as HIPAA (not HIPPA), includes important protections for millions of working Americans and their families. HIPAA is a federal law, but many states have their own variations of the law, which may impose other (stricter) requirements. Please see the State HIPAA links, below, for additional information for your state.
HIPAA amends the Internal Revenue Code to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, administrative simplification, and for other purposes. HIPAA may:
- Increase your ability to get health coverage for yourself and your dependents if you start a new job;
- Lower your chance of losing existing health care coverage, whether you have that coverage through a job, or through individual health insurance;
- Help you maintain continuous health coverage for yourself and your dependents when you change jobs; and
- Help you buy health insurance coverage on your own if you lose coverage under an employer’s group health plan and have no other health coverage available.
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Among its specific protections, HIPAA:
- Limits the use of pre-existing condition exclusions;
- Prohibits group health plans from discriminating by denying you coverage or charging you extra for coverage based on your or your family member’s past or present poor health;
- Guarantees certain small employers, and certain individuals who lose job-related coverage, the right to purchase health insurance; and
- Guarantees, in most cases, that employers or individuals who purchase health insurance can renew the coverage regardless of any health conditions of individuals covered under the insurance policy.
In short, HIPAA may lower your chance of losing existing coverage, ease your ability to switch health plans and/or help you buy coverage on your own if you lose your employer’s plan and have no other coverage available.
– Information provided by our partner HR Essentials
HIPAA: Frequently Asked Questions.
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