Chapter 13
COBRA/SOCIAL SECURITY/HIPAA
Christy Brewster, Legal Assistant
Summary
- COBRA applies to employers of 20 or more employees.
- Employees, including former employees, covered under an existing health plan are eligible for continuation coverage under COBRA.
- Qualifying events:
- death of the employee;
- voluntary or involuntary termination (other than for gross misconduct);
- reduction of hours of covered employee's employment;
- divorce or legal separation of covered employee from his or her spouse;
- covered employee's becoming entitled to Medicare coverage;
- dependents of a COBRA-covered former employee who would lose COBRA coverage because of Medicare coverage;
- dependent child's ceasing to be a dependent child under terms of plan;
- Chapter 11 bankruptcy (applies only to retiree coverage); or
- strike or walk-out.
- Continued coverage must be the same as the group health plan coverage enjoyed by the qualified beneficiary immediately before the qualifying event. On an ongoing basis, the coverage offered must be identical to coverage provided to other beneficiaries who are similarly situated, but with respect to whom a qualifying event has not occurred.
- Period of extended coverage varies from 18 to 36 months, depending on the qualifying event.
- Under ordinary circumstances, the cost of continuation coverage may not exceed 102% of the applicable premium.
- Premium may be changed only once during a 12-month period and medical condition may not be the basis of the change.
- Participants must be given a minimum of 45 days from the date of COBRA election to remit their first premium for the election period coverage, and a 30-day grace period for each premium due for coverage thereafter.
- The employee must notify the plan administrator within 60 days of divorce, legal separation, or a child ceasing to be a dependent if the event results in loss of coverage.
- The employer must notify the plan administrator within 30 days of termination of employment, reduction of scheduled work hours, retirement, death of the employee, or eligibility for Medicare benefits.
- The plan administrator must notify the covered employee within 14 days after the plan administrator receives notification that a qualifying event has occurred.
- HIPAA's portability requirements generally took effect for plan years beginning after June 30, 1997. HIPAA also has two accountability requirements (governing electronic transactions and the protection of the privacy of health information). The electronic transactions portion generally took effect on October 14, 2002, while the privacy rules took effect on most group health plans on April 14, 2003.
- HIPAA requirements apply to most health plans maintained by employers and to insurers and HMOs that offer health insurance in connection with group health plans.
- HIPAA's portability requirements include rules relating to:
- preexisting condition limits;
- crediting prior coverage;
- prior coverage certifications;
- special enrollment periods;
- health status nondiscrimination; and
- disclosure of benefit reductions/SPO requirements.