What is COBRA insurance?
COBRA provides certain former employees, retirees, spouses, former spouses and dependent children the right to temporarily continue their health coverage at group rates. The law generally covers health plans maintained by private-sector employers with 20 or more employees, employee organizations, or state or local governments. Many states have "mini-COBRA" laws that apply to the employees of employers with less than 20 employees. The system is designed to prevent employees who are between jobs from experiencing a lapse in coverage.
FAQs – Ohio continuation coverage upon termination of employment:
Q 1: I have health insurance provided under a policy purchased by my employer. If I lose my job, what happens to my health insurance?
A: If your employer has a group sickness and accident policy covering or providing health care benefits for employees who are Ohio residents for hospital, surgical, or major medical on an expense incurred or service basis (other than for specified diseases or for accidental injuries only) and the policy is in effect and covers an eligible employee at the time your employment is terminated, you will be able to continue your coverage under that policy if certain conditions are met.
Q 2: What are those conditions? Do I need to be an “eligible employee” to take advantage of continuation coverage when I lose my job?
A: Yes, you need to:
(a) Be continuously insured under a group policy or under the policy and any prior similar group coverage replaced by the policy, during the entire three-month period preceding the termination of your employment;
(b) Not have voluntarily terminated your employment and the termination of employment is not a result of any gross misconduct on your part;
(c) Not be, and not become, covered by or eligible for coverage by Medicare under Title XVIII of the Social Security Act, as amended;
(d) Not be, and not become, covered by or eligible for coverage by any other insured or uninsured arrangement that provides hospital, surgical, or medical coverage for individuals in a group other than the coverage you had immediately prior to your termination.
Q 3: How do I know about my continuation rights under my employer’s policy?
A: The certificate of coverage or other evidence of coverage provided to you by your employer must have a description of your continuation rights. Also, when you receive notice that your job has been terminated, your employer must provide notice of your continuation rights at that time. Your employer must tell you at that time how much you will pay on a monthly basis for the continuation coverage.
Q 4: Is there a time limit by which I have to tell my employer that I want to purchase continuation coverage? What exactly do I need to do?
A: There is an election period after you lose your job during which you must decide and take action to continue your coverage under your employer’s group policy. You must file a written election of continuation with your employer and pay your employer the first contribution required. Your request and payment must be received by the employer by the earlier of any of the following dates:
(a) Thirty-one days after the date on which your coverage terminates;
(b) Ten days after the date on which your coverage terminates, if your employer has notified you of the right of continuation prior to that date;
(c) Ten days after the employer notifies you of the right of continuation, if the notice is given after the date on which your coverage terminates.
Remember, you must pay to your employer, on a monthly basis, in advance, the amount of contribution required by your employer for the continuation coverage.
Q 5: Is Ohio’ continuation coverage the same as COBRA coverage?
A: No, Federal COBRA coverage is also continuation coverage but it applies to employer’s health coverage when the employer has twenty or more employees. Ohio’s continuation coverage applies to employer sickness and accident coverage and the employer’s eligible employees generally, and to an employer not provided for under federal law, such as church plans or governmental plans. Therefore, Ohio’s continuation law generally applies to church employer plans, governmental employer plans and employer plans when the employer has fewer than twenty employees. Your employer’s plan will not have both COBRA and Ohio continuation. It will have one or the other.
Q 6: My certificate says if I lose my job I can continue my coverage or convert it to another policy. What does that mean?
A: Continuation and conversion are options you have when you leave your employer’s group sickness and accident policy due to termination of employment. Continuation means you can elect and pay for coverage under your employer’s policy even though you are no longer an employee. The coverage may or may not contain dental or vision coverage but it will contain your hospital, surgical or major medical coverage. Conversion means you will have chosen to have a new policy issued to you that has nothing to do with the employer’s group coverage and may have quite different benefits. You may elect either continuation or conversion coverage, but not both. If you elect continuation of coverage, when that ends, you may elect any conversion coverage available under section 3923.122 of the Revised Code. If you convert, you cannot then continue coverage under your employer’s plan. Remember, you will likely pay the entire cost of either continuation or conversion coverage yourself.
Q 7: How long does my continuation coverage last?
A: If you are otherwise eligible, and you elect continuation in writing and pay your employer the contributions required on time, you may continue your hospital, surgical, and medical insurance under the policy, for you and your eligible dependents, for a period of twelve months after the date that the insurance coverage would otherwise terminate by reason of the termination of your employment. Continuation coverage also ends if: If you are otherwise eligible, and you elect continuation in writing and pay your employer the contributions required on time, you may continue your hospital, surgical, and medical insurance under the policy, for you and your eligible dependents, for a period of twelve months after the date that the insurance coverage would otherwise terminate by reason of the termination of your employment. Continuation coverage also ends if:
(a) You cease to be an eligible employee described in Question 2 above;
(b) You fail to make a timely payment of a required contribution, in which event the coverage shall cease at the end of the coverage for which contributions were made; or
(c) The policy is terminated, or your employer terminates participation under the policy, unless your employer replaces the coverage by similar coverage under another group policy or other group health arrangement.
These are a few questions to illustrate how continuation in Ohio law works. You can also read the full statute governing continuation (3923.38 Continuing policy upon termination of employment) under Ohio law on the Ohio Lawriter website.