What is COBRA continuation coverage?
COBRA coverage is the same coverage that the Plan gives to other participants or beneficiaries who aren't on COBRA. Each "qualified beneficiary" who elects COBRA will have the same rights under the Plan as other participants or beneficiaries covered under the component or components of the Plan elected by the qualified beneficiary, including open enrollment and special enrollment rights. (Certain newborns, newly adopted children, and alternate recipients under QMCSOs may also be qualified beneficiaries.) The first day of COBRA coverage and the maximum continuation period is determined by plan. Please refer to your COBRA Election Form enclosed to determine your first day of COBRA coverage and maximum continuation period ("Last Day of COBRA").
Who are the qualified beneficiaries?
Each person (qualified beneficiary) in the categories below can elect COBRA continuation coverage if they are losing group health plan coverage as a result of a COBRA qualifying event:
- Employee or former employee
- Spouse or former spouse
- Dependent child(ren) covered under the Plan on the day before the event that caused the loss of coverage
- Child who is losing coverage under the Plan because he or she is no longer a dependent under the Plan
How to Access Your COBRA Account
- Select Login at claritybenefitsolutions.com
- Click Register, select Participant and click Next
- Complete the required fields
be sure to use the email you provided to your employer for your benefits. Zip code should be that of your home address. - On the next screen choose the Access Your COBRA Coverage tile
How to Elect Coverage
If you decide to enroll in COBRA coverage, there are two ways to make your COBRA election.
You can elect COBRA and choose a payment option online through the Clarity Portal. Or you can elect COBRA by completing the paper COBRA Election Form that will be mailed to you. The form must be returned by mail to the address provided on the final page of this notice.
Your paper and online form will be pre-populated – simply review and ensure this information correct. If any information is incorrect or missing, simply update the form with the correct information and/or notify Clarity customer service.
You have 60 days to make your COBRA election. If you do not make your election within this window of time, your opportunity to enroll in COBRA continuation coverage expires, without an opportunity to reinstate it. You must complete the election online or return your COBRA Election Form to ACME TPA within 60 days from the date on which the COBRA Election Notice is sent to you.
Your COBRA continuation coverage will begin the day after your employer-provided coverage ended, as indicated by the “COBRA Start Date” on the COBRA Election Form. As such, COBRA is generally continuous with no interruption in coverage. If you make your COBRA election later in your election period (for example, after a month), your COBRA continuation coverage will be effective retroactively with no interruption in coverage. As such, you must pay premiums retroactively within the 45-day period, even if you have not incurred any health plan claims during this time.
How to Pay for COBRA Coverage
COBRA enrollment requires both an affirmative election and payment for the continuation coverage. You can pay online at the time of election or any other time before the initial payment deadline. A month must be paid in full before Clarity will notify your insurance carrier(s) to start the process of retroactively reinstating your health coverage. You will not have access to care until the enrollment process is completed, including notifying the group health plan(s).
Your prior health coverage with your employer was canceled as of the Loss of Coverage Date of the benefit and the date your COBRA would begin the day after the Loss of Coverage Date. You must timely elect and pay for COBRA before your coverage will be retroactively reinstated by the Plan. The timely election and payment are critical to avoid an interruption in coverage. Even if your COBRA is being subsidized by your previous employer, you must complete the election process.
Coverage reinstatement does take time. You can contact your group health plan directly to confirm if reinstatement has been completed; contact details are on your health insurance ID card. A group health plan generally does not notify ACME TPA when reinstatement is complete. If group health plan enrollment has not occurred within 10 business days from the payment receipt date, please contact Clarity customer service.
For upcoming appointments, notify your doctor’s office that you are in the process of electing COBRA. Visit and payment arrangements are handled by your doctor, not the group health plan or Clarity. You may also need to reschedule your appointment. You may be able to keep your appointment and settle directly with the provider. The provider may require that you pay the full cost of the care at the time of your appointment and request reimbursement later, or they may allow you to pay your cost-share as expected under your group health plan. For prescription drug coverage, your pharmacy will likely require you to pay out of pocket for the prescription. However, confirm with your pharmacy whether they will refund you directly once your coverage is reinstated. All of these are possible temporary disruptions during the COBRA enrollment process.
While waiting for COBRA coverage to go into effect, you may have to pay out of pocket for covered expenses and submit reimbursement claims to the group health plan(s). As COBRA is a continuation of prior coverage, you will continue the same plan year deductible and cost-sharing imposed by the health plan, per your employer's health plan documents.
COBRA, Medicare Entitlement and Secondary Payer (MSP) Rules
If you become enrolled in another employer group health plan or become entitled to Medicare Part A or Part B after you elect COBRA, these events are disqualifying events for COBRA coverage:
- If you enroll in a new employer plan or your spouse’s employer plan, you are no longer eligible to continue COBRA coverage.
- If you first become entitled to (enrolled in) Medicare Part A or Part B, you are no longer eligible to continue COBRA, except if your Medicare entitlement is due to End Stage Renal Disease.
Please read this carefully. There is no differentiation between Medicare entitlement and enrollment when it comes to COBRA continuation. COBRA continuation will generally be the secondary payer of claim when you are eligible to enroll in Medicare. Insurance companies treat COBRA as the secondary payer of claims even if you are not actually enrolled in Medicare. You alone are responsible for checking with your health plan to determine which plan is the primary and secondary payer during your COBRA period.
You should also know that electing COBRA does not extend the period during which you may enroll in Medicare. In general, if you don’t enroll in Medicare Part A or B when you are first eligible because you are still employed, after the initial enrollment period for Medicare Part A or B, you have an 8-month special enrollment period to sign up, beginning on the earlier of
- The month after your employment ends; or
- The month after group health plan coverage based on current employment ends.
If you don’t enroll in Medicare Part B and elect COBRA continuation coverage instead, you may have to pay a Part B late enrollment penalty and you may have a gap in coverage if you decide you want Part B later. If your enrollment in Medicare Part A or B is effective on or before the date of your COBRA election, COBRA coverage may not be discontinued on account of Medicare entitlement, even if you enroll in the other part of Medicare after the date of the election of COBRA coverage.
Adding a Dependent to your COBRA Continuation
If similarly situated employees of the employer group health plan can add dependents at open enrollment, so can COBRA Qualified Beneficiaries. You may still add a family member under your COBRA continuation. That family member will not have any direct Qualified Beneficiary rights, unless they are a newborn or newly adopted. For example, the family member is not able to remain enrolled on COBRA without a Qualified Beneficiary enrolled on COBRA.
If you acquire a new dependent (due to marriage, birth, or adoption), you may elect to add your new dependent to COBRA. You or your family member must notify both ACME TPA and ABC Company in writing within 30 days of the marriage, birth or adoption, in order to enroll the dependent on COBRA.
If your spouse or dependent children lose other group health coverage as specified under HIPAA, you may be able to add your spouse or dependent child to your COBRA coverage. You are responsible for notifying the Plan Administrator and ACME TPA in writing within 30 days of the date of loss of coverage of the other group health plan coverage, in order to enroll your dependent on COBRA. If you do not provide the required notification within 30 days, you will lose your right to add your dependents under the HIPAA Special enrollment rules.
Other Options Instead of COBRA
There are three primary options to consider as alternatives to COBRA coverage. You may be able to enroll in coverage through:
- A spouse or domestic partner’s health plan
- Individual health insurance directly through an insurance company
- Individual health insurance through the Marketplace/Exchange
If you are married or in a domestic partnership, coverage may be available through your spouse or domestic partner if they are employed and have group health coverage. If a child is under age 26, coverage may be available through your spouse’s plan if they are employed and have group health coverage. You have a right to enroll in a spouse’s group health plan coverage since you lost your group health plan coverage. You must exercise this option with your spouse or domestic partner’s employer within 30 days of your loss of your prior employer.
Individual health insurance can be purchased directly through an insurance company. You may apply for individual insurance (in lieu of electing COBRA), but you must do so within a “special enrollment period.” Your “special enrollment” period is 30 days from the date you lose your employer group health coverage. After 30 days, your special enrollment period will end, and you will not be able to enroll in an individual plan until the individual plan’s designated open enrollment period.
Individual health insurance can be purchased online through a Marketplace/Exchange in lieu of electing COBRA or after your COBRA coverage expires. If you apply for individual insurance in lieu of electing COBRA, you must do so within a “special enrollment period.” Your “special enrollment period” is 60 days from the date you lose your employer health plan coverage. You may apply for insurance or enrollment in individual insurance through the Marketplace at any time during that 60-day window. After 60 days, your special enrollment period will end, and you may not be able to enroll until the Marketplace open enrollment period.
If you elect COBRA, you can switch to a Marketplace plan during a Marketplace open enrollment period. If your COBRA coverage period expires or if the employer no longer offers any health plan coverage, you may be able to enroll in the Marketplace through the special enrollment period outside of open enrollment. Please contact your state Marketplace directly to discuss your individual situation and the need for coverage.
Importantly, if your COBRA coverage is voluntarily terminated, such as failure to make a timely premium payment or by your request prior to the end of the maximum coverage period, you will not be able to enroll in a Marketplace plan until the next annual open enrollment. If you sign up for Marketplace coverage instead of electing COBRA coverage, you cannot switch to COBRA coverage under any circumstances.
Coverage through the Marketplace may cost less than COBRA. Federal subsidies made available through the Affordable Care Act may be available through the Marketplace if your household income is between 138% and 400% of the Federal Poverty Level. If you are eligible for a federal subsidy, the only way to get the subsidy is to be covered through the Marketplace insurance.
It can be difficult or impossible to switch to another coverage option. When considering your options for health coverage, you may want to think about:
Cost: Other options, such as coverage on a spouse’s plan or through the Marketplace may be less expensive than COBRA.
Provider Networks: You may want to check to see if your current health care providers participate in a network as you consider other options.
Drug Formularies: A change in your health coverage may affect your costs for medication and in some cases, your medication may not be covered by another plan.
Severance Agreements: If your former employer is paying all or a portion of your COBRA premiums for a period of time under a severance agreement and you do not want to continue COBRA after the subsidy ends, you may have to wait until the next annual open enrollment period to enroll onto a spouse’s plan, an individual plan, or a Marketplace plan. This is because voluntary termination of coverage when your severance expires is not a qualifying life event under the HIPAA regulations that would trigger a special enrollment. Please contact your state Marketplace directly to confirm if the loss of an employer-sponsored subsidy qualifies for a special enrollment in your state Marketplace.
Service Areas: Some plans limit their benefits to specific service or coverage areas.
Other Cost-Sharing: You may want to check what the copayments, deductibles, coinsurance, and other amounts are for alternative health coverage options. If you change to other coverage, you may pay more out of pocket than you would under COBRA because the new coverage may impose a new deductible or a new out of pocket maximum mid-year.
Federal Premium Subsidies: If you may be eligible for a federal subsidy, you will want to consider securing coverage through the Marketplace in order to take advantage of potentially lower premium costs. The Marketplace is the only source for securing a federal subsidy.
If you feel that you do not have enough plan information to act intentionally in electing or declining coverage, you may contact the group health plan directly to request additional plan information. You may also refer to the employer Summary of Benefit Coverage (SBC) and Summary Plan Description (SPD) documents.
To receive more information about COBRA and HIPAA, visit the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) website at http://www.dol.gov/ebsa or call their toll-free at 1-866-444-3272.
Clarity is committed to full and complete compliance with privacy regulations regarding your personal information and your health information. ACME TPA retains personal information necessary for the administration of COBRA coverage and health information to the extent it is provided to us by COBRA Qualified Beneficiaries in the course of servicing your coverage. ACME TPA does not rent or sell your personal or health information.
The Health Insurance Premium Payment (HIPP) Program in California will pay the health insurance premiums (including COBRA premiums) for certain Medi-Cal beneficiaries. For more information visit the California Department of Health Care Services website at http://www.dhcs.ca.gov.
Under the Ryan White HIV/Aids Treatment Modernization Act of 2006, persons unable to work because of disability due to HIV/Aids and who are at risk of losing their private health insurance may be able to qualify for premium payment assistance through the CARE Health Insurance Premium Payment (CARE/HIPP) program. For more information visit the California Department of Public Health website at: https://www.cdph.ca.gov.
Eligible Pension Benefit Guaranty Corporation (PBGC) recipients, or Trade Adjustment Assistance (TAA) recipients, may be able to qualify for premium payment assistance through the Health Coverage Tax Credit (HCTC) Program. For more information, visit the Internal Revenue Service (IRS) website at https://www.irs.gov/pub/irs-utl/pbgc_information_guide.pdf.
