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COBRA Law

Most people are unaware of COBRA law. They tend to ask questions like what are COBRA laws, COBRA termination, and COBRA violation? People may turn to Experts for insights or solutions. Listed below are five of the Top COBRA Law Questions.

What is COBRA?

Consolidated Omnibus Budget Reconciliation Act, is also known as COBRA. In 1986 is when COBRA came to be a law. COBRA grants someone the right to decide to continue with health insurance benefits that the individual could lose behind from decreasing the individual’s employment hours, leaving their job, or being fired from work. The individual could maintain the insurance up to eighteen months. In some cases, some individual’s might maintain it a little longer.

Can a COBRA policy be terminated if paid one day late if the insurance cashed the check and then sent the termination letter?

If the check was not postmarked on time, this is the fault of the insured and not the insurer. If they cashed the check and have not sent a refund this is something you can argue with them. However, the insurer has the right to terminate the policy immediately if payment is not received or postmarked in accordance with the terms of the policy. This means that if the insurer does not agree to reinstate you could complain to the department of labor, which oversees COBRA, but all they will review is whether or not the terms of the policy were complied with.

What are the limitations if an employer does not offer COBRA to an employee in a timely manner?

• IRS excise tax penalty of $100 per day for each violation. This fine can be increased to $200 for each day in which there was more than one Qualified Beneficiary per family.
• An ERISA penalty of $110 per day payable to each Qualified Beneficiary for each day the employer was not in compliance.
• The employer can be held liable for payment of legal fees, court costs and even for medical claims incurred by a Qualified Beneficiary.

Thus for each beneficiary, it is $110.00 per day, plus attorney's fees and cost. The problem is that you have to prove that they did not send you a COBRA notification. They will probably say that they did send it out, and you must not have received it.

Can individuals qualify for longer periods of COBRA continuation coverage?

In most situations, yes, disability can extend the 18 month period of continuation coverage for a qualifying event that is a termination of employment or reduction of hours. To qualify for additional months of COBRA continuation coverage, the qualified beneficiary must:

• Have a ruling from the Social Security Administration that he or she became disabled within the first 60 days of COBRA continuation coverage
• Send the plan a copy of the Social Security ruling letter within 60 days of receipt, but prior to expiration of the 18-month period of coverage

If these requirements are met, the entire family qualifies for an additional 11 months of COBRA continuation coverage. Plans can charge 150% of the premium cost for the extended period of coverage.

Can someone get COBRA if they was terminated while out on STD?

Any time you are terminated from employment you are entitled to COBRA benefits. The employer should have sent you a notice for COBRA and if they have not, you need to contact the state department of labor and file a complaint.

COBRA Law is a diverse topic; it can cover a lot of issues or situations one after another. Often times individuals turn to Experts with questions such as what are COBRA laws, COBRA insurance law, and federal COBRA law.
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