Illinois COBRA Health Insurance – What are My Options?

September 10, 2011 Category: Health

Prior to 1986, Illinois residents were required to be full time employees before health coverage was available to them and their families. The passage of COBRA changed that requirement, making it possible for part time, retired and even terminated employees to buy coverage through their employer’s group plan at a discounted rate-at least for a limited time. If you are facing the loss of your group health insurance plan, it is important that you learn about COBRA so you will make the best decisions for you and your family. 

What is COBRA?

The Federal Consolidated Omnibus Reconciliation Act or COBRA gives employees whose health care coverage is ending the chance to continue coverage by purchasing through their employer’s group plan for a short amount of time. COBRA applies to the employee as well as a spouse and dependent children who may also stand to lose health care coverage on account of divorce, death, eligibility for Medicare, or a loss of dependent status. In most cases, COBRA only applies to employers with 20 or more employees.

In Illinois, if you work for an employer who has less than 20 full time employees, COBRA benefits may still be available to you. According to Illinois Health Insurance Continuation Rights Law, group insurance plans that are covering 2-19 people may qualify for 9 months while dependents may be covered for 2 years.

Under COBRA, a group plan is defined as a plan that provides medical benefits for employees and their dependents through insurance. Benefits include inpatient and outpatient hospital care, physician care, surgery, prescription drugs, and in some cases, vision and dental care. Life insurance is not covered under COBRA. 

Who is Entitled to Receive Benefits?

Group health plans for employers with 20 or more employees are subject to COBRA. Both full time as well as part time employees are eligible. Benefits are available for the employee, his or her spouse and any dependent children. In some cases, retirees, their spouse and dependents are also covered.

As an Illinois resident, you have 60 days to accept COBRA benefits if you qualify. As required by law, your health plan administrator must inform you of your rights to choose to continue benefits through COBRA. However, it is not free and if you choose COBRA coverage, you are responsible for paying immediately. In most cases, you will be responsible for 100% of the total insurance cost plus a 2% processing fee. 

When Would You Need COBRA?

There are very specific situations where COBRA coverage would be useful. COBRA calls these instances “qualifying events” and they are basically event that cause an individual to lose health care coverage. The specific type of event determines who receives benefits and for how long. Standard coverage is 18 months for termination or reduced hours and 36 months for most everything else.

Types of Qualifying Events

For employees there are two types of qualifying events making you eligible to receive COBRA benefits- voluntary or involuntary termination of employment and reduction in the number of hours of employment.  For spouses, a qualifying event includes termination of the spouses employment or a reduction in hours, eligibility for Medicare, divorce or legal separation and death of the covered employee. For dependent children, a qualifying event would be the same as for a spouse plus loss of dependent child status under plan rules.

Remember, COBRA benefits are only temporary. At some point you may need to purchase health insurance for you and your family. While you may not be able to get group insurance rates, you can still find affordable coverage. Consider dependable and reliable Blue Cross Blue Shield Illinois health plans for your health care needs. Health care coverage is important. Understanding your rights and the options afforded you in the event you may lose your benefits will help you make informed decisions regarding health care coverage for you and your family.