But if your spouse became eligible for Medicare and then left his or her employment (and thus lost access to employer-sponsored coverage) within 18 months of becoming eligible for Medicare, you can continue your spousal coverage with COBRA for up to 36 months from the date your spouse became eligible for COBRA. 5 So for example, if your spouse became eligible for Medicare five months before retiring, you'd be able to keep your spousal coverage via COBRA for another 31 months after your spouse retires, since that would be 36 months from when your spouse became eligible for Medicare.
Full Answer
Do spouses and dependents qualify for Cobra if they have Medicare?
Some people may decide to keep their COBRA coverage along with Medicare in order to retain additional benefits offered through the employer’s health plan. Do spouses and dependents qualify for COBRA if they lose coverage when an employee ages into Medicare? Yes. Employee enrollment in Medicare is considered a qualifying event under COBRA.
Can my employer keep me on Medicare if I have Cobra?
This is prohibited in most instances by the Medicare Secondary Payer rules (MSP rules) which provide that employers must allow employees to continue coverage on the group health plan, even once enrolled in Medicare. This is best illustrated by an example: John works for XYZ Company which has 200 employees and is subject to COBRA and the MSP rules.
What happens to my spouse’s COBRA benefits if I retire?
If coverage for the retiree is terminated as a result of their Medicare entitlement, the covered spouse and children would be eligible for up to 36 months of COBRA coverage on the retiree plan.
Is Medicare a Cobra qualifying event for active employees?
So it is rarely a COBRA qualifying event for active employees. But, Medicare statutory rules allow employer-sponsored group health plans to reduce or terminate coverage if retired employees become entitled to Medicare due to age.
Can my spouse stay on COBRA If I go on Medicare?
Your spouse and dependents may keep COBRA for up to 36 months, regardless of whether you enroll in Medicare during that time. You may be able to keep COBRA coverage for services that Medicare does not cover.
How does COBRA interact with Medicare?
If you have COBRA before signing up for Medicare, your COBRA will probably end once you sign up. You have 8 months to sign up for Part B without a penalty, whether or not you choose COBRA. If you miss this period, you'll have to wait until January 1 - March 31 to sign up, and your coverage will start July 1.
Can I have both Medicare and COBRA?
If you have Medicare first and then become eligible for COBRA, you can have both Medicare and COBRA. It is important to remember that Medicare pays first and COBRA pays second.
Is Medicare entitlement A COBRA qualifying event?
Medicare entitlement of the employee is listed as a COBRA qualifying event; however, it is rarely a qualifying event. In situations where it is a qualifying event, it is only a qualifying event for the spouse or children that are covered under the group health plan.
Can you get COBRA after age 65?
It rarely, rarely, RARELY makes sense if you are sixty-five or older to elect COBRA (the temporary extension of group coverage) even when it is subsidized by the former employer as part of a severance package. If you are on COBRA when you become eligible for Medicare, the COBRA is typically supposed to end.
How long can a spouse stay on COBRA?
36 monthsIf the qualifying event is the death of the covered employee, divorce or legal separation of the covered employee from the covered employee's spouse, or the covered employee becoming entitled to Medicare, COBRA for the spouse or dependent child lasts for 36 months.
Is Medicare primary or secondary to COBRA?
When you're eligible for or entitled to Medicare due to ESRD, COBRA pays first, and Medicare pays second during a coordination period that lasts up to 30 months after you're first eligible for Medicare. After the coordination period ends, Medicare pays first.
Is COBRA always secondary to Medicare?
COBRA is always secondary to Medicare. This means that it only pays after Medicare pays. If you do not enroll in Medicare when you become eligible for it, it will be as if you have no insurance.
Can you have Medicare and employer insurance at the same time?
Medicare paying secondary means that your employer insurance pays first, and Medicare pays on some or all of the remaining costs. Medicare works with current employer coverage in different ways depending on the size of the employer.
Does Medicare cancel COBRA?
If you become entitled to Medicare after you've signed up for COBRA, your COBRA benefits cease.
Is electing Medicare a qualifying event?
Although a loss of coverage occurs when employees voluntarily remove themselves from the health plans, the reason (attaining other coverage, including Medicare) is not considered a qualifying event.
What happens if you enroll in Cobra?
This means that if your employees enroll in COBRA instead of Medicare, once COBRA coverage ends, they will have to wait until the next annual enrollment period to enroll in Medicare, and they will have to pay late penalties. The late penalties are not minor, either. For Medicare Part B, for example, the monthly premium goes up 10 percent ...
What is the cobra law?
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a federal law that requires employers to offer health care continuation to covered employees, their spouses and their dependents after a qualifying event. Enrollees can be required to pay 102 percent of premium costs, which includes the full premium and a 2 percent administrative fee.
How much does Medicare Part B premium go up?
For Medicare Part B, for example, the monthly premium goes up 10 percent for every 12-month period enrollment was delayed. Enrollees have to pay this penalty for the rest of their lives. If your employees are trying to decide between COBRA and Medicare, make sure they understand that they must enroll in Medicare if they want to avoid expensive ...
How to contact CMS about Medicare?
Your employees can contact the CMS Benefits Coordination & Recovery Center at 1-855-798-2627 with questions about Medicare and COBRA. As always, do your best!
Is Medicare Part A free?
Some younger individuals with certain chronic health conditions may qualify as well. Some of your employees may be disappointed to learn that Medicare is not free, although most enrollees qualify for premium-free Medicare Part A.
Is Medicare a qualifying event?
Yes. Employee enrollment in Medicare is considered a qualifying event under COBRA. Imagine this scenario: One of your employees turns 65 and ages into Medicare, but he’s not ready to retire yet. He keeps working. Now he has two health plan options: his group health plan and Medicare.
Is Cobra the same as Medicare?
If someone is enrolled in both COBRA and Medicare, Medicare is the primary insurance. In other words, Medicare pays first, and COBRA may pay some of the costs not covered by Medicare. Certain benefits are not included in traditional Medicare. For example, dental, vision and hearing benefits are generally excluded from Medicare coverage, ...
How many employees can you have with Cobra?
In general, COBRA only applies to employers with 20 or more employees. However, some states require insurers covering employers with fewer than 20 employees to let you keep your coverage for a limited time.
How long does Cobra last?
COBRA coverage generally is offered for 18 months (36 months in some cases). Ask the employer's benefits administrator or group health plan about your COBRA rights if you find out your coverage has ended and you don't get a notice, or if you get divorced.
What is a Part B late enrollment penalty?
In general, a health plan offered by an employer or employee organization that provides health coverage to employees and their families. This is called "continuation coverage.".
How long do you have to sign up for Part B?
If you’re eligible for Medicare, you don’t qualify for COBRA coverage without having to pay a premium. You have 8 months to sign up for Part B without a penalty, whether or not you choose COBRA.
What is the number to call for Medicare?
If your group health plan coverage was from a state or local government employer, call the Centers for Medicare & Medicaid Services (CMS) at 1-877-267-2323 extension 61565. If your coverage was with the federal government, visit the Office of Personnel Management.
Do you have to tell Cobra if you are divorced?
You or the covered employee needs to tell the plan administrator if you qualify for COBRA because you got divorced or legally separated (court-issued separation decree) from the covered employee, or you were a dependent child or dependent adult child who's no longer a dependent.
Do you have to tell your employer if you qualify for Cobra?
Once the plan administrator is notified, the plan must let you know you have the right to choose COBRA coverage.
How long does it take to get Medicare if you don't have Cobra?
If you’re not going to be eligible for Medicare yourself within 18 months (or up to 36 months, depending on the circumstances), you’ll have to come up with another plan for coverage when your COBRA continuation coverage runs out.
How long can you keep cobra?
In most cases, COBRA allows you to continue coverage for 18 months. But if your spouse became eligible for Medicare and then left his or her employment (and thus lost access to employer-sponsored coverage) within 18 months of becoming eligible for Medicare, you can continue your spousal coverage with COBRA for up to 36 months from ...
How long do you have to pick a new insurance plan after losing your spouse's insurance?
Losing the coverage you had under your spouse's plan will make you eligible for a time-limited special enrollment period in the individual insurance market, on- or off-exchange (note that in this case, you have 60 days before the loss of coverage, and 60 days after the loss of coverage, during which you can pick a new plan).
Is Medicaid a separate program from Medicare?
It’s easy to confuse Medicaid and Medicare, but they're separate programs with different benefits and different eligibility criteria. In many states, low-income people making up to 138% of federal poverty level are eligible for Medicaid.
How long can a spouse continue Cobra?
A covered employee's spouse who would lose coverage due to a divorce may elect continuation coverage under the plan for a maximum of 36 months. A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation. After being notified of a divorce, the plan administrator must give notice, generally within 14 days, to the qualified beneficiary of the right to elect COBRA continuation coverage.
Who administers Cobra?
The Departments of Labor and Treasury have jurisdiction over private-sector group health plans. The Department of Health and Human Services administers the continuation coverage law as it applies to state and local governmental health plans.
What is FMLA coverage?
The Family and Medical Leave Act (FMLA) requires an employer to maintain coverage under any group health plan for an employee on FMLA leave under the same conditions coverage would have been provided if the employee had continued working. Coverage provided under the FMLA is not COBRA coverage, and taking FMLA leave is not a qualifying event under COBRA. A COBRA qualifying event may occur, however, when an employer's obligation to maintain health benefits under FMLA ceases, such as when an employee taking FMLA leave decides not to return to work and notifies an employer of his or her intent not to return to work. Further information on the FMLA is available on the Website of the U. S. Department of Labor's Wage and Hour Division at dol.gov/whd or by calling toll-free 1-866-487-9243.
What is continuation coverage?
If you elect continuation coverage, the coverage you are given must be identical to the coverage currently available under the plan to similarly situated active employees and their families (generally, this is the same coverage that you had immediately before the qualifying event). You will also be entitled, while receiving continuation coverage, to the same benefits, choices, and services that a similarly situated participant or beneficiary is currently receiving under the plan, such as the right during open enrollment season to choose among available coverage options. You will also be subject to the same rules and limits that would apply to a similarly situated participant or beneficiary, such as co-payment requirements, deductibles, and coverage limits. The plan's rules for filing benefit claims and appealing any claims denials also apply.
How long do you have to elect Cobra?
If you are entitled to elect COBRA coverage, you must be given an election period of at least 60 days (starting on the later of the date you are furnished the election notice or the date you would lose coverage) to choose whether or not to elect continuation coverage.
What is the law for cobra?
The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees, or by state or local governments. The law does not apply to plans sponsored by the Federal Government or by churches and certain church-related organizations. In addition, many states have laws similar to COBRA, including those that apply to health insurers of employers with less than 20 employees (sometimes called mini-COBRA). Check with your state insurance commissioner's office to see if such coverage is available to you.
Can you use the Health Coverage Tax Credit for Cobra?
The Health Coverage Tax Credit (HCTC), while available, may be used to pay for specified types of health insurance coverage ( including COBRA continuation coverage).
How long is Cobra coverage?
In certain circumstances, if a disabled individual and non-disabled family members are qualified beneficiaries, they are eligible for up to an 11-month extension of COBRA continuation coverage, for a total of 29 months. The criteria for this 11-month disability extension is a complex area of COBRA law. We provide general information below, but if you have any questions regarding your disability and public sector COBRA, we encourage you to email us at [email protected].
How long does an employer have to issue a Cobra election notice?
If the employer also is the plan administrator and issues COBRA notices directly, the employer has the entire 44-day period in which to issue a COBRA election notice.
What is a Cobra notice?
A notice of COBRA rights generally includes the following information: A written explanation of the procedures for electing COBRA, The date by which the election must be made, How to notify the plan administrator of the election, The date COBRA coverage will begin, The maximum period of continuation coverage, The monthly premium amount,
How long does it take to get a Cobra notice?
Separate requirements apply to the employer and the group health plan administrator. An employer that is subject to COBRA requirements is required to notify its group health plan administrator within 30 days after an employee’s employment is terminated, or employment hours are reduced. Within 14 days of that notification, the plan administrator is required to notify the individual of his or her COBRA rights. If the employer also is the plan administrator and issues COBRA notices directly, the employer has the entire 44-day period in which to issue a COBRA election notice.
How long do you have to notify Cobra?
Qualified beneficiaries must be given an election period of at least 60 days during which each qualified beneficiary may choose whether to elect COBRA coverage.
What is the COBRA requirement?
Title XXII of the Public Health Service (PHS) Act, 42 U.S.C. §§ 300bb-1 through 300bb-8, applies COBRA requirements to group health plans that are sponsored by state or local government employers. It is sometimes referred to as “public sector” COBRA to distinguish it from the ERISA and Internal Revenue Code requirements ...
What is a Cobra election notice?
The COBRA election notice should contain the address to which premium payments should be sent and should be provided by the employer or group health plan administrator along with the amount of the premium due and its due date.
How long does a retiree have to have Cobra?
When retirees are covered under a separate group health plan or under the same plan as active employees but with different terms, however, employers must offer at least 18 months of COBRA coverage at the same time they offer retiree medical coverage.
What is Cobra insurance?
0 comment (s) For private-sector employers who offer group health insurance plans and have 20 or more employees, the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires that continuing medical care benefits be made available to former employees who lose their coverage due to a “qualifying event.”.
What is a termination of Cobra?
Under COBRA rules, “employment termination” is a triggering event if it results in loss of coverage for a covered employee, spouse or dependent children. While the termination can be involuntary (“for cause”) or voluntary (retirement, for example), being fired for gross misconduct disqualifies former employees.
How much excise tax can an employer pay in one year?
The maximum excise tax an employer can pay in one year is the lesser of 10 percent of the employer health plan costs in the previous year, or $500,000. Because the Department of Labor (DOL) administers the Employee Retirement Income Security Act (ERISA), which regulates the administration of retirement and health benefit plans, ...
How long does a spouse have to be on a disability to continue coverage?
If a retiree’s spouse or children lose coverage due to a qualifying event (death of the retiree, divorce or a child’s ceasing to be a dependent), employers must give them the opportunity to elect continued coverage, with a maximum coverage period of 36 months from the date of the qualifying event.
How long is the grace period for COBRA?
COBRA Fines and Penalties. The IRS is authorized to assess an excise tax penalty for an employer’s failure to follow COBRA guidelines after a 30-day grace period to correct a negligent or accidental violation.
Is COBRA a qualifying event for active employees?
So it is rarely a COBRA qualifying event for active employees. But, Medicare statutory rules allow employer-sponsored group health plans to reduce or terminate coverage if retired employees become entitled to Medicare due to age. If employers take such action and it leads to a loss of coverage for retirees’ spouses or dependents under the terms ...
How long is Cobra coverage for spouse?
If coverage for the retiree is terminated as a result of their Medicare entitlement, the covered spouse and children would be eligible for up to 36 months of COBRA coverage on the retiree plan.
How long is Jill eligible for Cobra?
Jill is eligible for 30 months of COBRA coverage (36 months of COBRA – 6 months of time that has elapsed since John’s entitlement to Medicare).
How long does Cobra last?
Generally, termination of employment or reduction in hours results in a maximum COBRA coverage period of 18 months for those covered on the group health plan at the time of the event, but there are special rules when either event occurs shortly after an employee becomes entitled to Medicare. These rules extend the maximum coverage period ...
When does John retire from XYZ?
John becomes entitled to Medicare on July 1st. John and Jill also remain covered under the group health plan offered by XYZ Company. On January 1st (6 months later), John retires and therefore John and Jill both experience a termination of employment qualifying event. John is eligible for 18 months of COBRA coverage.
Does XYZ Company offer Cobra to Jill?
Does XYZ Company have to offer COBRA to Jill? No. John voluntarily dropped coverage under the group health plan. XYZ Company did not, and is prohibited from, changing John’s eligibility for coverage under the group health plan because he enrolled in Medicare.
Is Medicare a qualifying event?
Medicare entitlement of the employee is listed as a COBRA qualifying event; however, it is rarely a qualifying event. In situations where it is a qualifying event, it is only a qualifying event for the spouse or children that are covered under the group health plan.
Does John work for XYZ?
John works for XYZ Company which has 200 employees and is subject to COBRA and the MSP rules. John is enrolled in the group health plan offered by XYZ Company, and he also has elected to cover his spouse Jill under the plan. John just turned age 65 and has become eligible for Medicare, but Jill is only 62 years old and is not yet eligible ...