Employees who lose their employment will be eligible for healthcare coverage through the Affordable Care Act (ACA) marketplace if they have not elected to get COBRA health insurance after being fired. To determine what the most affordable option for health insurance would be, compare the costs and benefits between the ACA and COBRA insurance.
To be eligible for COBRA, employees are required to be enrolled in their work health plan. Employers are given 14 days from when they know that a qualifying event has occurred to notify the employee and their eligible beneficiaries of their coverage under COBRA insurance. When the employer informs the employee, it is called the election notice.
Election notices are required to have:
- All the pertinent information regarding COBRA benefits and how to make an informed choice about their coverage.
- The name of the COBRA administrator that should be contacted.
- The steps on how to accept or refuse COBRA coverage.
- Resources for more information.
After this initial election notice, employees are given 60 days to decide whether to accept or deny their COBRA coverage. To do so, employees must fill out, sign, and return a form that is included in the election notice.
If the COBRA insurance plan is accepted, the coverage will be provided retroactively to when the previous coverage ended. Beneficiaries who receive COBRA insurance benefits for any period are not able to enroll in health insurance through the ACA until the upcoming open enrollment period.
Employees will be responsible for covering the premium costs during the time when they have not decided. If the employee denies the COBRA insurance, they are allowed to change their decision within the 60-day enrollment window.
Additionally, each of the adult beneficiaries that qualify for COBRA is permitted to accept or deny the insurance as well. For instance, an employee’s spouse can opt-out of COBRA insurance even if the employee is still receiving insurance through the continuous coverage of the plan. They are also permitted to change their decision within the 60-day window.
The benefits of COBRA are only temporary. Keep reading to learn about how long coverage lasts and alternatives to COBRA insurance may be helpful options.