COBRA insurance in Arizona is a type of continuation of health insurance coverage after you leave your job or the day after your active benefits end. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows people to obtain benefits access when they are changing or losing a job, entering retirement, facing a divorce, or facing a death. If you qualify for COBRA Health insurance in Arizona, you can expect your coverage for up to 36 months, depending on the situation.
Keep in mind that COBRA Arizona coverage is much more expensive than choosing a private health insurance plan in most situations. However, if you are no longer eligible for coverage through your employer, you may wish to continue with Arizona COBRA coverage. There’s much to know about how this works.
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What Is COBRA?
The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, requires all employers who have 20 or more employees to offer continuing health coverage to individuals who would otherwise lose their health insurance benefits after they leave employment with the company.
The rules for COBRA enrollment can vary from one state to the next. Here are a few things that all Arizona residents should know before they begin their COBRA enrollment.
How Does COBRA Work in Arizona?
Those who are eligible for COBRA insurance under federal law can obtain COBRA in Arizona. This includes:
- Termination of employment
- Death of an employee who provided health care coverage to you
- Divorce or legal separation from a party that provided health care coverage to you
- No longer being a dependent child
As of Jan 1, 2019, Arizona became the last state to adopt what is known as Mini-COBRA. These are a set of rules that allow employees who work in companies smaller than 20 people to still obtain COBRA coverage, whereas before, they were unable to obtain it.
What Is Arizona Mini-COBRA?
Mini-COBRA falls under A.R.S. § 20-2330. Eligible individuals may continue to receive their health insurance coverage for up to 18 months if they leave an employer that has fewer than 20 employees. This is a valuable financial safety net for many employees who may be working for a smaller employer but lose their jobs.
The cost of Arizona Mini-COBRA can be as high as or even higher than federal COBRA coverage. It may be more affordable to purchase private health insurance in some situations.
The most important people to benefit from Arizona COBRA’s coverage are those who would be priced out of or unable to obtain coverage through private health insurance due to pre-existing medical conditions, as well as those with ongoing medical needs. In these situations, costs for private insurance may be higher. With Mini-Arizona coverage, there’s still an option to receive coverage when there may not be otherwise.
What Is COBRA Insurance Mini-COBRA?
Under Mini-COBRA laws, if a qualifying event takes place, employers must provide access to Mini-COBRA coverage, requiring employers to act as a liaison to offering this coverage. That includes collecting premiums, tracking enrollment timeframes, and providing information when the insurance plan renewal occurs. Employers must also extend the maximum timeframe for multiple qualifying events to take place.
Here are some details about how COBRA Health insurance works under this law:
- Mandated firms: All Arizona-based small businesses, defined as any business with 20 or fewer employees on average during the calendar year
- Eligible employees: This is any employee or covered dependent of that employee that was enrolled in a medical insurance plan for a minimum of 3 months, ineligible for Medicare, and experienced a qualifying event.
- Qualifying events: Numerous events may fall under this allowance, including termination of employment or called to active duty, divorce or separation, employee’s death, employer bankruptcy and retired employees, dependents losing coverage, and child losing dependent status.
- Election period: Employees have 60 days from the date of the qualifying event to notify the employer that they want to continue coverage. If the employer’s notice was considered late, the individual will receive 120 days to elect coverage.
- Required notices: Mandated employers must mail a letter to their employees and dependents when one of the qualifying events occurs within 30 days of the date of the event.
- Multi-qualifying events: In situations where there is more than one qualifying event that may make a person eligible, the employer must extend an additional 18 months of COBRA access.
- Disability extension: If a person is determined to be disabled under the rules set by the Social Security Administration, the employer should provide an 11-month extension for a total of 29 months of coverage.
- Completion: Mini-COBRA ends at the earliest point depending on the following – the day the participant has completed their time frame allowance, the date paid through the date in which the participant does not meet the initial 45 days, on the day the employee becomes eligible for Medicare, Medicaid, or others.
FAQ
How does COBRAhealth insurance work?
It can be complex, but there is help available to you. Turn to a licensed insurance agent to get the guidance you need.
Does Coverage Insurance Stay the Same After Enrolling in COBRA?
You will have the same health care coverage under COBRA as you had under your previous employer’s group health care. There are no restrictions due to pre-existing conditions with COBRA. If you had a precondition that was covered with your former health care plan, it would still be covered under COBRA. Any new coverage options that are offered to the group plan, such as vision or dental, while you are enrolled in COBRA will also be made available to you as well.
How much does COBRA Insurance AZ cost?
The cost of COBRA coverage will vary from state to state. The enrollee and their qualified dependents can continue their coverage at the full cost of their coverage. This amount includes the employer’s contribution along with an administrative fee that cannot exceed five percent of the premium cost.
What Are COBRA Insurance Updates in Arizona?
There are no significant updates to Mini-COBRA or COBRA insurance in Arizona for 2025. However, credible coverage is changing. Credible coverage refers to the type of coverage that is considered adequate to meet the state’s requirements. It must be as good as or better than Medicare Part D coverage under the state’s laws when the policy is provided by an employee.
In 2025, the definition and criteria for coverage will be updated. This is meant to make the coverage easier to understand and will ensure that comprehensive prescription drug coverage is available to those who may be transitioning to Medicare.
Employers must update their group prescription drug coverage to meet the Medicare Part D coverage. More so, credible coverage also applies to COBRA and state retiree health plans. As noted, these plans must comply with stricter prescription drug coverage.
How Long Does COBRA Insurance AZ Last?
COBRA coverage starts on the date your original health insurance coverage ends. For eligible employees, COBRA coverage can last for 18 months from the time you elect coverage. The dependents of a COBRA enrollee can remain covered for up to 36 months if the individual switches to Medicare, gets a divorce, or if they die. Otherwise, their dependents will also be covered for 18 months.
There are some circumstances where COBRA coverage may last longer than 18 months. If you are healthy, you cannot extend your COBRA coverage. After the 18-month period is over, you should have another form of insurance, or else you will be uninsured. Therefore, you should start looking for new health insurance options once your enrollment period in COBRA begins. If you are considered legally disabled, you are eligible for an 18-month extension.
Important Things to Remember Before Enrolling in COBRA Insurance Arizona
Even if you are eligible for COBRA coverage, you do not have to accept it. You have the right to opt out of COBRA. However, you should be aware of the risks involved with being uninsured. If you have an unexpected accident or sudden illness, you will be fully responsible for all your healthcare costs. Also, if you remain uninsured for a prolonged time, it could make it difficult for you to become insured again in the future.
How Does COBRA Work: How to Get Help
If you are looking at COBRA benefits as your ideal choice, take a few minutes to do the following:
- What is COBRA coverage available to you? If you are in a small company, mini-COBRA may be available, but in larger companies, federal COBRA may be available.
- Determine if private health insurance may be a more affordable route for you. A licensed agent can help you compare.
- Inform your employer that you want to access COBRA medical insurance. Your employer facilitates this process on your behalf.
Note that COBRA healthcare continues the coverage you have. However, it does not apply long term. Consider the importance of private health insurance to protect your future. Contact us for more information on your options.
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