COBRA coverage lasts either 18 months or 36 months, depending on the type of qualifying event. If the qualifying event is termination of employment or reduction in hours, COBRA will be available for 18 months. For other qualifying events, the duration of COBRA benefits is 36 months. However, in certain circumstances, the duration of continuation coverage may be shortened or extended. COBRA benefits may be terminated early when:
1) Premiums are not fully paid or are not paid on time; 2) The employer stops offering health insurance to its employees; 3) The qualified beneficiary gets coverage under another group health plan; 4) The qualified beneficiary becomes eligible for Medicare; 5) The qualified beneficiary does something such as fraud that justifies the insurance company terminating coverage
If the insurance company terminates benefits early, it is required to provide the qualified beneficiary with an early termination notice.
Beneficiaries who have continuing coverage for 18 months can have their benefits extended in two circumstances:
One of the qualified beneficiaries becomes disabled – If this happens, all qualifying beneficiaries on the plan can have their benefits extended an additional 11 months. The insurance company is allowed to increase the premium to up to 150% during this extended period.
In order to qualify for this extension, the Social Security Administration (SSA) must determine that the qualified beneficiary is disabled within 60 days of the continuation coverage starting and the disability must continue during the rest of the initial 18-month period of continuation coverage.
There is a second qualifying event – If during the initial 18-month period of COBRA, a second qualifying event (divorce, death, legal separation, Medicare entitlement, loss of dependent child status) AND this event would have resulted in loss of coverage under the plan if the first qualifying event hadn’t happened, COBRA can be extended another 18 months. The qualifying beneficiary must notify the plan of this second event within 60 days.