COBRA Insurance MA: How to Continue Coverage

What is COBRA Insurance MA? 

COBRA, the Consolidated Omnibus Budget Reconciliation Act, provides the right to continue employer-based health insurance coverage after experiencing a qualifying life event, such as job loss, reduced work hours, or a change in family status. This continuation coverage is essential for individuals in Massachusetts who need to maintain their healthcare benefits after their standard coverage ends. 

So, how does COBRA work in MA? Who qualifies for Mass COBRA or what events are eligible for continuation of coverage? Read on to know everything.  

Who Qualifies for COBRA Coverage? 

Eligible beneficiaries for COBRA coverage, known as “qualified beneficiaries,” include:

• The employee who loses coverage due to end of employment or reduced hours.
• The spouse or former spouse who loses coverage due to divorce, legal separation, or the employee’s death.
• Dependent children who lose eligibility based on age or other factors.

Qualifying Life Events 

Several events can trigger eligibility for COBRA health insurance MA continuation:

1. Termination of employment (except for cases of gross misconduct).
2. Reduction in employment hours, affecting eligibility for standard health benefits.
3. Death of the covered employee.
4. Divorce or legal separation.
5. A dependent child reaching the age limit for coverage.

Other Coverage Alternatives 

While COBRA insurance MA ensures continuation of the same employer-based health plan, Massachusetts residents may have other coverage options. The Massachusetts Health Connector and the federal Health Insurance Marketplace provide alternatives that might be more affordable, offering benefits such as tax credits and cost-sharing reductions. Plans available through the Marketplace may often cost less than COBRA due to these subsidies, and Medicaid or CHIP might offer low-cost or free options for eligible individuals.

Coverage Duration and Extension Options

Mass COBRA coverage typically begins immediately after the employer-provided coverage ends. Depending on the qualifying event, coverage lasts up to:

• 18 months for job termination or reduced work hours.
• 36 months for other events like death, divorce, or loss of dependent status.

Extensions may be available if the qualified beneficiary is disabled or if another qualifying event occurs. Beneficiaries must notify the health plan administrator within 60 days of these events to secure an extension.

Costs of COBRA Coverage

COBRA can be costly as beneficiaries pay the full premium, including the portion previously covered by the employer, plus a 2% administrative fee. Massachusetts-specific rates vary by plan; for example:

• Harvard Pilgrim Access America: Individual coverage costs $1,280.73, and family coverage is $2,856.88 per month.
• Wellpoint Community Choice: Offers one of the lower rates, with individual coverage at $757.59 and family coverage at $1,880.43 per month.

Rates are subject to change annually, so check with your health plan administrator for the latest costs.

Enrollment Deadlines and Payment Requirements

To retain COBRA health insurance MA benefits, you must meet all the following deadlines and terms. 

1. Complete and submit the COBRA election form within 60 days of losing coverage.
2. Make the first premium payment within 45 days after submitting the election form.
3. Continue monthly payments by the specified due date, usually with a 30-day grace period.

Failure to meet these deadlines or make timely payments will result in a loss of COBRA coverage.

Transitioning Between COBRA and Marketplace Coverage

Beneficiaries have options to switch to Marketplace plans either during the annual open enrollment period or through a special enrollment if they qualify (e.g., due to marriage or the birth of a child). Switching from COBRA insurance MA to a Marketplace plan can reduce premiums and out-of-pocket expenses but requires careful planning to avoid coverage gaps.

Medicare and COBRA 

For those eligible for Medicare, COBRA may still be an option. However, Medicare will be the primary payer, with COBRA secondary. It’s advisable to review potential penalties and costs associated with delaying Medicare enrollment if opting for COBRA instead.

Considerations When Choosing COBRA or Alternative Coverage

When deciding on COBRA, it’s essential to evaluate:

• Cost: Mass COBRA typically costs more than other plans.
• Provider networks: Verify if your preferred healthcare providers are within the network of any new plan.
• Drug formularies: Check if your current medications are covered.
• Service area restrictions: Ensure coverage is available in your new location if moving.
• Out-of-pocket expenses: Compare deductibles, copayments, and coinsurance across options.

Paying for COBRA 

Beneficiaries are responsible for ensuring timely payments to maintain COBRA coverage. Payments can be made through the Massachusetts Group Insurance Commission (GIC) member portal or other specified methods. If payments are missed or delayed beyond the grace period, coverage will terminate.

For More Information 

For additional guidance, Massachusetts residents can reach out to the Group Insurance Commission at P.O. Box 556, Randolph, MA 02368, or call 617-727-2310. Resources are also available through the U.S. Department of Labor or the Massachusetts Health Connector.

Protecting Your Rights 

Now that you know how does COBRA work in MA, it’s important to not lose benefits when you lose your job. To avoid losing COBRA benefits, keep the plan administrator informed of address changes, pay premiums on time, and report any qualifying life events that may impact coverage.

For more information on group health insurance for small businesses, get in touch with our experts at Taylor Benefits Insurance.