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elaws - employment laws assistance for workers and small businesses

- Health Benefits Advisor


Employers often provide some employee benefits relating to disability. In the employee benefits environment, disability can be defined in many ways. What is considered to be a disability for one disability benefit plan may not be considered a disability under a different plan. Keep in mind that disability benefits are different from group health plan benefits. Generally, whether or not a condition is considered to be a disability or whether or not an individual is eligible to receive benefits from a disability plan depends on the plan rules. Therefore, if you have questions regarding whether or not you are entitled to disability benefits, you should consult the SPD (summary plan description) for your plan and contact your plan administrator.

Having a disability can also affect your employment status - such as a job loss or reduction in hours - in a way that could affect your group health benefits, depending on the plan rules. Under some circumstances describe below, you or your dependents also may be eligible for a longer period of COBRA continuation coverage because of a disability.

If you or your family lose group health benefits due to a qualifying event that is either a termination of employment or reduction in hours, you and your family members may be eligible to obtain COBRA continuation coverage at group rates. Generally, the maximum period of COBRA continuation coverage for these qualifying events is 18 months.

However, if you or a family member becomes disabled at any time either before becoming eligible for COBRA continuation coverage or within the first 60 days of being covered by COBRA continuation coverage, you may be able to extend the maximum period of COBRA continuation coverage of 18 months, by up to an additional 11 months. This could result in a total of 29 months of COBRA continuation coverage. This disability extension will apply to the person disabled, as well as to all family members who are receiving COBRA continuation coverage due to the same qualifying event as the person disabled.

In order to qualify for the disability extension to COBRA continuation coverage, a qualified beneficiary must be found by the Social Security Administration (SSA) to be disabled within the meaning of Title II or XVI of the Social Security Act. The SSA must also find that you were disabled at some point during the first 60 days of COBRA continuation coverage. Therefore, if you believe you may qualify for the disability extension, it is important to contact the SSA and apply for disability benefits under the Social Security ACT. In addition, you must notify the group health plan administrator of the SSA's determination of your disability before you are entitled to the disability extension.

If you have an SSA disability determination, you can and should give the plan notice of your SSA disability determination as soon as possible. The plan should have rules for how this notice should be provided, and you can find information on the plan's rules  in the plan's SPD (summary plan description), which you can request from the plan administrator. The plan can require you to provide this notice within the first 18 months of the COBRA continuation coverage and within 60 days after the later of (1) when you received the SSA determination or (2) when your COBRA continuation coverage began.

You may find the premium payment that you must pay for the additional 11 months of COBRA continuation coverage is more than what you were paying during the original 18-month period. You can be charged up to 150% of the plan's total cost of your coverage for the disability extension period.

However, if you are receiving COBRA continuation coverage due to legal separation or divorce from the covered employee, the death of the covered employee, entitlement to Medicare by the covered employee, or loss of dependent child status, the maximum period of COBRA continuation coverage is 36 months and cannot be extended by this disability extension.

For more information, see An Employee's Guide to Health Benefits Under COBRA.