Can COBRA Be Extended? How and When You Can Qualify
Understand how and when you can extend your COBRA health coverage. Get clarity on the criteria and process for continued benefits.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law providing a temporary bridge for health coverage when certain events lead to a loss of employer-sponsored group health benefits. While COBRA coverage is inherently temporary, specific circumstances can allow for its duration to be extended beyond the standard periods.
Standard COBRA Coverage Periods
COBRA continuation coverage typically lasts for a set period, depending on the event that triggered the loss of coverage. For most individuals, if the qualifying event is termination of employment (unless for gross misconduct) or a reduction in work hours, COBRA coverage can last for up to 18 months.
Other qualifying events allow for a longer standard coverage period, typically up to 36 months. These events include the death of the covered employee, divorce or legal separation from the covered employee, a covered employee becoming entitled to Medicare, or a dependent child losing their eligibility status under the plan.
Qualifying Events for Extended COBRA
COBRA coverage can be extended beyond the initial 18-month period under specific conditions related to disability or the occurrence of a second qualifying event. These extensions are not automatic and require specific criteria to be met and timely notification to the plan administrator.
An 11-month extension, resulting in a total of 29 months of coverage, may be available if a qualified beneficiary is determined to be disabled by the Social Security Administration (SSA). This disability determination must occur before the end of the initial 18-month COBRA period and within 60 days of the qualifying event that triggered COBRA, or at any time during the first 60 days of COBRA coverage. All qualified beneficiaries covered under the same COBRA plan are eligible for this extension if one family member qualifies. The qualified beneficiary has the responsibility to notify the plan administrator of the SSA disability determination. This notification should include a copy of the SSA determination letter and the dates of the disability.
A second qualifying event can extend COBRA coverage for certain beneficiaries to a total of 36 months from the date of the initial qualifying event. Common second qualifying events include the death of the covered employee, divorce or legal separation, a covered employee becoming entitled to Medicare, or a dependent child ceasing to be eligible for coverage under the plan. This extension applies to beneficiaries who were already on COBRA due to an initial 18-month qualifying event, and the second event must occur during that initial 18-month COBRA period. The qualified beneficiary must notify the plan administrator of the second qualifying event. Documentation, such as a death certificate, divorce decree, proof of Medicare enrollment, or evidence of dependent status change, will be required to confirm eligibility for this extension.
The Process for Extending COBRA
Qualified beneficiaries must notify the plan administrator of a disability determination or a second qualifying event within specified timeframes. For a disability extension, notification to the plan administrator of the SSA determination generally needs to occur within 60 days after the SSA determination, and before the end of the initial 18-month COBRA period. For a second qualifying event, notification is typically required within 60 days after the event, or within 60 days of the date coverage would end, whichever is later.
Upon receiving proper notification, the plan administrator is responsible for sending out a new COBRA election notice, sometimes referred to as an “Extension Notice.” The qualified beneficiary then has a specific timeframe, usually 60 days from the date of this notice or the date initial coverage would have ended (whichever is later), to elect the extended coverage.
To elect the extended coverage, the beneficiary typically returns a signed election form to the plan administrator. Coverage may be retroactive to the date the initial COBRA period ended, meaning there could be a requirement to make retroactive premium payments. The initial premium payment for elected COBRA coverage is due within 45 days after the date of election, while subsequent payments are typically due monthly.
Financial Considerations for Extended COBRA
For the standard COBRA period, individuals typically pay up to 102% of the total cost of the health plan premium. This amount includes both the employee and employer contributions, along with an administrative fee, usually 2%.
The premium cost can increase during the 11-month disability extension. For these additional months (months 19 through 29), the premium can be up to 150% of the plan’s total cost of coverage.
COBRA premiums are generally due monthly, and plans must provide a grace period for payments. This grace period is typically 30 days from the premium due date. Failure to make full payment within this grace period can lead to termination of coverage. While coverage can be reinstated retroactively if payment is made within the grace period, consistent and timely payments are necessary to avoid lapses in health benefits.