Health Benefits Advisor
Former Spouse's Employer Has 20 or More Employees
If you or your dependent children were covered by a group health plan sponsored by your former spouse's employer, employee organization (such as a union), or both, on the day before your legal separation or divorce from the covered employee, then the individuals who were covered may each have the right to elect COBRA continuation coverage at group rates. If that coverage is no longer offered, you will generally be able to obtain whatever coverage your former spouse's employer, employee organization (such as a union), or both, now makes available to similarly situated non-COBRA beneficiaries. Also, if your former spouse terminated your health coverage under a group health plan in anticipation of divorce or legal separation, you may have the right to elect COBRA continuation coverage even if you were not covered on the day before your divorce or legal separation.
The plan administrator of the group health plan sponsored by your former spouse's employer, employee organization (such as a union), or both, must be notified of the divorce or legal separation before you can elect COBRA continuation coverage in these circumstances. You can and should give the plan notice of the divorce or legal separation as soon as possible. The plan should have rules for how this notice should be provided. You can find information on the plan's rule in the plan's SPD (Summary Plan Description), which you can request from the plan administrator. The plan must allow you at least 60 days after the divorce or legal separation to provide this notice. Not later than 14 days after your spouse's group health plan receives notice of your legal separation or divorce, you should receive a written election notice from the group health plan explaining your rights to elect COBRA continuation coverage.
The election notice from the group health plan should explain how long you and/or your dependent children will have to decide whether or not to elect COBRA continuation coverage. The plan must give you at least 60 days from the date the notice is provided to you, or from the date your coverage ended, whichever is later, to elect COBRA continuation coverage. Each qualified beneficiary will have a separate right to elect COBRA continuation coverage. The election notice should also explain how much you must pay for coverage and when and to whom the payments are due. You may find that COBRA continuation coverage costs more than the coverage you had before your divorce or separation because many employers will not continue to pay a share of the cost of your coverage after such an event. However, the payment you will make while on COBRA continuation coverage will be at group rates and is generally less expensive than coverage you would obtain on your own directly from an insurance carrier or HMO (Health Maintenance Organization). For more information, see An Employee's Guide to Health Benefits Under COBRA.
COBRA continuation coverage can last for up to 36 months and generally cannot be extended. However, coverage may terminate earlier if you fail to make timely premium payments, you become covered by another group health plan or Medicare after electing COBRA continuation coverage, your former spouse's employer, employee organization (such as a union), or both, cease to sponsor a group health plan, you move or relocate to an area which the group health plan does not serve, or for cause according to the plan rules. If the plan terminates your COBRA continuation coverage early for any reason, the plan must give you notice explaining why it is doing so and describing the date of termination.
How to Choose Among Health Coverage Options
Depending on your circumstances, you and your family members may have health care options other than COBRA continuation coverage available, including coverage through a plan sponsored by your employer. Before making any decisions, you should carefully consider the information on COBRA continuation coverage and any other coverage for which you and your family members may be eligible to determine which one will best meet your needs. Keep in mind that COBRA continuation coverage is temporary health coverage. However, in some instances, you may be eligible again for certain special enrollment rights once your COBRA coverage expires.
In choosing among the options available to you, you should review the SPD (Summary Plan Description) for each available group health plan to determine which plan best meets your needs. You should also review and compare the information on the other coverages for which you are eligible. In making your decision, you may want to consider such things as:
- Any waiting period (or affiliation period) imposed under the plans;
- Types of benefits offered (Is dependent coverage available? Do the benefits cover your family's medical needs?);
- Cost of coverage (premiums, co-payments and deductibles for prescription drugs and doctor visits);
- Limitations on coverage; and
- Any exclusions from coverage (treatments, procedures, conditions or prescription drugs).