COBRA Enrollment and Your Rights
I received a letter with a COBRA enrollment form in the mail. What do I need to do with it?
You’ve received this letter because you’ve lost your health insurance coverage due to a qualifying event. If you wish to enroll in COBRA, the COBRA enrollment form must be completed and returned within 60 days of the notification date printed on the letter or 60 days from the loss of coverage, whichever is later. Even if you do not plan to enroll in COBRA, we recommend that you save the enrollment form for the entire 60 days.
How do I enroll?
To enroll in COBRA, your completed enrollment form must be postmarked or faxed to SHPS within 60 days of the notification date or loss of coverage as noted in the enrollment package.
*To ensure a speedy enrollment, please complete these instructions:
- Sign where indicated.
- Provide your dependents’ information as indicated.
- Indicate the coverage you want.
- Make the first premium payment within 45 days of enrollment.
- Mail your completed enrollment form to the address indicated on the form.
- If including your first premium payment, mail payment only to:
SHPS
P.O. Box 105413
Atlanta, GA 30348-5413
Please allow 10-14 days for SHPS to process your enrollment. Also allow for an additional 10-14 business days after posting of your payment for your health insurance provider to update your insurance coverage.
*Submitting an enrollment form and/or payment does not guarantee COBRA coverage. Please refer to your general COBRA notice, your plan documents, and/or your COBRA election notice for information regarding coverage.
How is COBRA different than my regular health insurance?
Your former employer no longer pays a portion of the premium, and your portion of the premium is no longer deducted from your paycheck. Therefore, you must pay the entire premium plus a 2% administrative fee. Coverage is on a month-to-month basis and payment is due at the first of each month.
Why haven’t I received my COBRA enrollment?
The employer has 30 days to send out the information to the billing administrator when a qualifying event has occurred. The billing administrator has 14 days to process the information and send out a notification to the participant.
When is my COBRA coverage active?
Your coverage will be active when all of the following has occurred:
- The COBRA enrollment form has been fully completed, signed and received by SHPS.
- The first premium payment has been received by SHPS, posted to your account, and forwarded to your insurance carrier.
- Your insurance company has accepted your enrollment and has updated its records.
Receipt of your payment after the first of each month may impact continuous coverage at the carrier.
Who is SHPS and why am I paying them?
SHPS is a third-party administrator hired by your former employer to process your COBRA enrollment, collect your insurance premiums, and forward those premiums to your insurance carrier. With more than 24 years experience in COBRA administration and a dedicated internal compliance team, you can rest assured that you’re receiving all COBRA privileges required by law.
When am I eligible for COBRA?
Generally, when you, your spouse* or another eligible dependent loses group coverage due to:
- Job termination (whether voluntary or involuntary) or a reduction in hours of employment.
- Divorce or legal separation.
- Retirement.
- Medicare entitlement.
- Certain leaves of absence.
- No longer covered by parents’ insurance.
*Federal law does not extend COBRA coverage to domestic or same-sex partners.
When am I not eligible for COBRA?
Generally, you’re not eligible when:
- Job termination was due to gross misconduct, as determined by your former employer.
- Your former employer has less than 20 employees.
- You don’t submit your enrollment form within the required deadline.
- You don’t remit your first premium payment within the required deadline.
- You are not enrolled in a group health plan while an active employee.
- You lost your coverage due to a divorce and you did not notify your employer (or your spouse's former employer) of your divorce within the required notification timeframe.
Are there any special considerations for military leave?
Federal COBRA does not require any special treatment for those individuals on military leave. However, the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) provided for the continuation of health plan coverage for up to 18 months for those persons on military leave. Because this overlaps with COBRA, military leave was treated the same as COBRA.
In December of 2004, the Veterans Benefits Improvement Act of 2004 (VBIA) amended USERRA to extend health plan coverage up to a total of 24 months. Because this is longer than the 18 months allowed by COBRA, military leave beginning on or after December 10, 2004 may need to be treated differently than COBRA. Please contact your HR office to learn your employer’s specific policy for coverage continuation during military leave.
How does a pre-existing condition clause affect me?
Depending upon the terms of the plan, a pre-existing condition is any medical condition that was present or that has been diagnosed or treated within a specified period before the effective date of the health plan coverage. With the passage of HIPAA in 1996, pre-existing conditions can’t be considered when an insured changes or loses a job unless the insured has had a break in insurance coverage of 63 days or more, assuming the insured has had the coverage for a sufficient length of time.
This means that a new insurance plan may not cover conditions, such as asthma, heart disease, diabetes, pregnancy or any other illness or injury diagnosed or treated while you did not have health insurance. Having COBRA coverage may protect you against a pre-existing condition clause.
What is HIPAA?
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides expanded rights and protections for participants and beneficiaries in group health plans. Understanding these rights is important to your decisions about future health coverage. If you find a new job that offers health coverage, or if you are eligible for coverage under a family member's employment-based plan, HIPAA includes protections for coverage under group health plans that:
- Limit exclusions for pre-existing conditions.
- Prohibit discrimination against employees and dependents based on their health status.
SHPS cannot provide you with any guidance regarding the provisions of the plan. Please refer to the appropriate plan documents for more information on how that plan’s provisions will apply to you.
What is a HIPAA certificate of creditable coverage? And what is it used for?
If requested to do so by your former employer, SHPS will provide you with a HIPAA certificate to verify continuous coverage through COBRA and the length of that coverage. This certificate is issued as documentation of your prior health insurance coverage. Give a copy of your HIPAA certificate to your new employer’s health insurance plan administrator to offset any pre-existing condition clauses and to verify you had no lapse in coverage.
What kind of insurance coverage can be continued under COBRA?
Generally medical, dental, vision, prescription, health reimbursement arrangements (HRA), some Employee Assistance Programs (EAP), and, in some cases, health care *flexible spending accounts (FSA).
*FSAs may only be offered until the end of the current plan year.
What is the duration of COBRA coverage?
The length of time that an individual can be covered under COBRA depends on the qualifying event. Generally, COBRA coverage is 18 months. The maximum amount of time that an individual can be on COBRA is 36 months (see chart below).
