Seldom do persons remember what the acronym “COBRA” stands for because its provisions relating to health care constitute such a minor part of the entire congressional act. However, there are two main ways that COBRA affects health care coverage. The first relates to conversion and continuation of health care insurance coverage for individuals who leave an employer group plan. The second (and less known) provision guarantees minimum, life-sustaining treatment and stabilization of the physical condition of anyone presenting for emergency care, irrespective of the absence or presence of health care insurance coverage:
- COBRA Continuation or Conversion: Federal law (PL 99-272 as amended) generally requires that employers/plan administrators provide notice to plan beneficiaries (the insured employees) within a specified number of days of the event (termination of employment, reduction of work hours, etc.) that triggers COBRA rights. These rights allow the insured employee and/or covered family members to retain/continue the insurance coverage and health insurance benefits they had when they were covered under the employer’s plan. The continuation of coverage is for a specified period beyond employment (e.g., eighteen, twenty-nine, or thirty-six months). Importantly, the share of the premium or cost of the coverage remains the same during the COBRA period as it was during employment. However, there is no extension of coverage beyond the specified period, and insureds must then convert to a private policy or transfer to a new employer’s plan (which can be done at any time during COBRA continuation of benefits). Not all employers are subject to COBRA mandates, but many offer their own parallel conversion plans for continuation of benefits. Parallel conversion provisions were also created under changes to ERISA (the Employer Retirement Income Security Act) for self-insured plans.