Useful information for Those Enrolling in COBRA Insurance in Arizona
The loss of health insurance coverage can be devastating. It is an event that no one willingly wants to face. Residents of Arizona who recently had their job terminated may be allowed to keep their health insurance coverage. This is possible through a federal law known as COBRA. In some states, employees who had their hours cut and are no longer eligible for the employer’s insurance can also receive coverage through COBRA. However, the option for COBRA Insurance in Arizona due to a reduction of hours is no longer available.
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.
COBRA Insurance AZ
Before you start the enrollment process, you will first need to find out if you are eligible for COBRA. By federal law, you are entitled to elect COBRA under your group health plan.
Reasons for COBRA eligibility include:
- Termination of employment
- The reduction of employment hours that makes you no longer qualify for benefits. (under normal COBRA this is an option, but unfortunately, it is not available in Arizona)
- The death of the employee who provided health care coverage
- Divorce or a legal separation
- No longer a dependent child
It is important to know that your spouse or your dependent children are also eligible for COBRA coverage if they were initially covered under your health care plan on the date the qualifying event took place.
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 where before they were unable to obtain it. It also set into place regulations as to how and when the employees should be informed.
Will Coverage 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 will 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.
COBRA Insurance Arizona for 2023
Employers subject to the new Mini-COBRA law will need to issue a notice to all enrollees within 30 days of a qualifying event. The notice should inform them of:
- Their right to continue coverage at the full cost of the premium, plus an additional 5% administration fee.
- The deadline for all enrollees to elect continual coverage.
- The deadline for them to submit their initial and ongoing payments to the employer.
- Explain why the enrollee may lose their coverage if they fail to pay the premium or administrative fees.
Within 60 days of receiving this notice, the enrollees must elect continuation coverage. Within 45 days of the notice, they must submit their first premium payment as well as their 5% administrative fee.
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 be covered for 18 months also.
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 health care costs. Also, if you remain uninsured for a prolonged time, it could make it difficult for you to become insured again in the future.
Maintain Your Health Coverage by Enrolling in COBRA Insurance AZ
If you have recently lost your job in Arizona and have concerns about your health insurance, be assured that you are protected by law and will not lose coverage if you are eligible for COBRA insurance. When you enroll in COBRA, you will have the same health coverage as before. The term lasts for 18 months and you will need to pay a higher monthly premium, however COBRA is extremely beneficial because it allows you to maintain health insurance for yourself and your family until you can find a new job that offers health insurance.