How is COBRA initiated?

Within thirty days after certain qualifying events, the employer must notify its health plan administrator of the event. A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation. Within fourteen days, the administrator must alert the employee and family members, in person or by first class mail, of their right to elect COBRA. The only exceptions, if the health plan allows them, are: (1) the time limit for both notifications may be extended, and (2) it may be left up to plan administrators to determine whether an employee quit or reduced work hours, or whether a qualifying event occurred.

Beneficiaries have sixty days to decide whether to buy COBRA coverage. This period starts from the date that eligibility notification is sent by the plan administrator, or the date that the beneficiary lost the health insurance, whichever comes later. The COBRA coverage will be retroactive to the date that insurance benefits were lost.

A beneficiary may initially decide not to buy coverage, waving his or her right to it. However, beneficiaries may change their minds during the election period. COBRA coverage would then start on the date the waiver was revoked.

If a beneficiary moves, relocating out of the COBRA plan’s coverage area, the beneficiary will simply lose the coverage. The employer is not required to offer a plan in the new area.