Children Diagnosed With Cancer: Financial and Insurance Issues

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Keeping employer-sponsored health insurance coverage

There are federal laws which give people the chance to continue employer-sponsored medical insurance coverage (including for their children) when a person has a qualifying event (defined below in the COBRA section). For many people COBRA can be a good option, but for others it may cost less to buy an individual plan to cover yourself and your family on the state health insurance marketplace. You may also qualify for financial help in buying a marketplace plan, especially if your family income has dropped with the job loss.

COBRA (Consolidated Omnibus Budget and Reconciliation Act of 1986)

COBRA gives you, your spouse, and/or your dependents the right to keep your health insurance coverage at the employer’s group rates. But because the employer usually covers a portion of the plan cost when you’re employed, you usually pay much more than you did while employed. You must now pay the portion that your employer paid plus a small administrative fee. In most cases, you can keep the insurance for up to 18 months. Some people may be able keep it for their child a few months longer.

The new health care law now offers another option besides COBRA. You have the option to purchase new coverage through the state health insurance marketplaces. The marketplace plans may offer more affordable coverage options for you and your family than an employer plan through COBRA. Even if you lose your job at a time the marketplace does not have open enrollment, you have 60 days in which you can buy a marketplace plan. See “Enrolling in a marketplace plan” in the “Private health insurance options” section for details.

For those who don’t want to use a health insurance marketplace plan, COBRA is still available when coverage would normally be lost because of qualifying events, such as

  • Stopping work
  • Reducing work hours
  • Divorce or legal separation
  • The covered person becomes eligible for Medicare
  • A dependent child is no longer considered a dependent according to the terms of the plan
  • Death of the employee

How long COBRA allows people to keep their group medical insurance depends on the qualifying event. For example:

  • Up to 18 months of continued coverage is allowed if you stop working or reduce the number of hours you work.
  • 29 months of coverage is possible if a beneficiary is considered disabled. (This determination of disability is made by the Social Security Administration.)
  • 36 months of coverage is available for the spouse or child in cases of divorce or legal separation, the covered person becoming eligible for Medicare, death of the employee, or when a dependent child is no longer considered to be a dependent.

If a person is fired for gross misconduct, he or she is not eligible for COBRA – and neither are their children or spouse.

COBRA is not given automatically but must be chosen by the former employee or beneficiary within 60 days of getting the written COBRA “election notice.” (This is not always within 60 days of when you stopped working.) The employer must notify an employee in writing that COBRA is available after work is stopped or hours are reduced. If you elect to keep your and your dependents’ insurance through COBRA during that 60 days, it will retroactively cover back to the date the insurance ended.

But there’s also a deadline for notifying the plan administrator of qualifying events that don’t directly involve the employer, which varies according to the qualifying event. Whose responsibility it is to notify the plan administrator also depends on the qualifying event. In cases of family changes, the beneficiary must do it, for instance, in these situations:

  • Divorce
  • Legal separation
  • An employee’s child reaches the status of non-dependent (which can be up to age 26)
  • The employee becomes eligible for Medicare

This means it may be the employee, the employee’s spouse, or the employee’s adult child who needs to notify the plan administrator of a qualifying event. If this notice is not given within the deadline, the spouse or child may lose their COBRA rights.

If coverage for dependent(s) is ending for any of these reasons or because of the employee’s death, their coverage may be continued for up to 36 months. Contact the employer’s human resources person, the insurance company, or check the policy to find out what must be done and who should do it.

You can keep your health insurance 1) if the premium is paid, 2) until you, your child, or your spouse becomes covered under another group policy, but 3) only up to a certain time limit.

Premiums cannot be more than 102% of the cost of the plan for employees in similar situations who have not had a “qualifying event.”

COBRA coverage may be lost if your former employer stops offering all health insurance coverage.

COBRA is overseen by the US Department of Labor and they can give you more detailed information on how it works. (See the “To learn more” section.) Families often are concerned about being able to pay the premium for COBRA. If this is the case, talk to your health care team social worker who may have suggestions about how to get help with these costs.

For more details, read our document called What Is COBRA?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA)

This is a federal (US) law with many clauses that can help parents of children with cancer. The 2010 health care law no longer allows pre-existing condition exclusion waiting periods in most plans. The HIPAA rules about pre-existing conditions now only apply to grandfathered health plans that already existed when the new health law went into effect in March 2010.

Here are the ways HIPAA may help you:

  • It allows a parent who has had a grandfathered health plan for at least 12 months with no long loss of coverage (usually more than 63 days) to change jobs and be guaranteed other coverage with a new employer (as long as that employer offers group insurance). In this case there may be no waiting period and the pre-existing condition exclusion may be reduced or not applied.
  • It requires insurers to renew coverage for all employers and individuals as long as premiums are paid on time.
  • It guarantees that group insurance coverage is available to employers with 2 to 50 employees. (Note: It doesn’t require these small employers to buy and offer the insurance to their employees.)

The new health care law now governs some of the issues and limitations that were covered by HIPAA before. For more information about HIPAA visit our website or call and ask for What Is HIPAA? You can also contact your state department or commission of insurance. Go the “To learn more” section for contact information.

The Family and Medical Leave Act of 1993

The Family and Medical Leave Act (FMLA) requires employers with at least 50 employees to provide up to 12 weeks of unpaid, job-protected leave for eligible employees with certain family and medical needs. Having a child with cancer is certainly a reason to take family leave.

Employees are eligible if they have worked for a covered employer for at least 1,250 hours in the previous 12 months. For the time period of the FMLA leave, the employer must maintain the employee’s health coverage, including coverage for dependents.

Your child’s pediatric oncologist and the team social worker can help with the paperwork your employer needs for FMLA leave.

This act is regulated by the US Department of Labor’s Wage and Hour Division. They can give you more information. Check your local phone book under US Government, Department of Labor for contact information or find it in the “To learn more” section. Also, our document called Family and Medical Leave Act (FMLA) can give you more details on this option.

The Americans With Disabilities Act of 1990

The Americans With Disabilities Act (ADA) helps to protect anyone who has, or has had, certain disabilities, including cancer, against discrimination in the workplace. Parents of dependent children with cancer are also protected under this law.

The ADA requires private employers who employ 15 or more people, labor unions, employment agencies, and government agencies to treat employees equally, including the benefits offered them, without regard to their disabling condition or medical history. It also does not allow employers to screen out potential employees who have children with disabilities.

This Act, along with the Health Insurance Portability and Accountability Act (HIPAA), makes it easier for a parent to change jobs and move from one group insurance plan to another. This law is overseen by the US Equal Employment Opportunity Commission (EEOC). They can answer questions and give you more information by phone at 1-800-514-0301. You can also get more details in our document called Americans With Disabilities Act: Information for People Facing Cancer.

Last Medical Review: 01/14/2014
Last Revised: 01/14/2014