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Murray, Schoen & Homer Inc.
71 North Avenue
New Rochelle, NY 10801
Tel: 914-632-8989
Fax: 914-632-9170
email MSH
Cobra Insurance Tips
What is COBRA?
COBRA is the acronym for the Consolidated Omnibus Budget Reconciliation Act. It was created in 1985 to provide premium reductions for health benefits. The American Recovery and Reinvestment Act of 2009 (ARRA), was amended on December 19, 2009 by the Department of Defense Appropriations Act.
What does this mean for you as an employer?
Employers with 20 or more employees are usually required to offer COBRA coverage and to notify their employees of the availability of such coverage. COBRA applies to plans maintained by private-sector employers and sponsored by most state and local governments.
More details about COBRA coverage are included in the booklet An Employer's Guide to Group Health Continuation Coverage Under COBRA - The Consolidated Omnibus Budget Reconciliation Act of 1986. To request a copy, call EBSA toll-free: 1.866.444.EBSA (3272).
What does this mean for you as an employee?
If you were involuntary terminated between September 1, 2008 and February 28, 2010 you may qualify for the right to purchase group health coverage through COBRA. Eligible individuals pay only 35% of their COBRA premiums and the remaining 65% is reimbursed to the coverage provider via a tax credit. The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.
If your employer continues to offer a group health plan, the employee and his/her family can retain their group health coverage for up to 18 months by paying group rates. The COBRA premium may be higher than what the individual was paying while employed but generally, the cost is lower than that for private, individual health insurance coverage.
The plan administrator must notify affected employees of their right to elect COBRA. The employee and his/her family each have 60 days to elect the COBRA coverage; otherwise, they lose all rights to COBRA benefits.
COBRA generally does not apply to plans sponsored by employers with fewer than 20 employees. Many States have similar requirements for insurance companies that provide coverage to small employers. The premium reduction is available for insurers covered by these State laws.
For complete information, visit the U.S. Department of Labor website at www.dol.gov/ebsa
Contact a Murray, Schoen & Homer representative to learn more: info@homerinsurance.com or 914-632-8989
Independent insurance brokers providing personalized financial planning and insurance services including homeowners insurance, business insurance, professional liability and group medical benefits. Murray, Schoen & Homer Inc is a New York State licensed insurance agency located in New Rochelle, NY and serves the surrounding Westchester County communities including Larchmont, Mamaroneck, Mt. Vernon, Harrison, Eastchester and Pelham, New York.
As a licensed entity in the State of New York we want to notify you that this is not an offer to sell insurance or an
advertisement of insurance anywhere except the State of New York, United States of America.