Keeping employer-sponsored health insurance coverage when you leave your job

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).

COBRA (Consolidated Omnibus Budget and Reconciliation Act of 1986)

COBRA gives you, your spouse, and/or your dependents the right to continue health insurance coverage for a certain length of time. Though you still get group rates, you usually pay much more than when you were working. You must now pay the portion that your employer paid plus a small administrative fee.

COBRA is 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 is able to get Medicare
• A dependent child is no longer considered to be 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 the 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 insurance through COBRA during that 60 days, it will retroactively cover you back to the date your 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
• 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 the details of what must be done and who should do it.

You can keep your health insurance if the premium is paid, until you, your child, or your spouse becomes covered under another group policy, but only up to a certain time limit. Premiums cannot be above 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 plan coverage.

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

• It allows a parent who has had group medical insurance 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. For dependent children and many young adults up to age 26, there are new protections under the Affordable Care Act that do not allow pre-existing condition exclusion periods. (See the section called “The Affordable Care Act of 2010.”)
• HIPAA requires insurers to renew coverage for all employers and individuals as long as premiums are paid on time.
• HIPAA also guarantees that group insurance coverage is available for employers with 2 to 50 employees. But it doesn’t require these small employers to buy and offer the insurance to their employees.
• HIPAA helps protect anyone left out of group health coverage after COBRA has run out. If you are eligible and act within 63 days of losing COBRA coverage, HIPAA guarantees that you can buy some type of coverage and that you will have a choice of at least 2 options. But it’s important to know that no one will notify you that you are eligible or of the 63-day time limit. Contact your state insurance department or commission to find out what’s available to you, or call us.

For more information about HIPAA visit our Web site 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 for certain family and medical reasons. 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, 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.

The Affordable Care Act of 2010

Many people are afraid they will lose their health coverage and their family’s coverage if they lose their jobs. Some face dollar limits on the amount of care their health plan will cover. The Affordable Care Act, passed in 2010, changes health care in many ways that help families with cancer. For instance, the new law:

• Removed lifetime dollar limits and restricted yearly dollar limits on health benefits starting in September 2010. It will remove all yearly limits in 2014.
• Does not allow insurance companies to deny coverage for pre-existing conditions (such as cancer) in children younger than age 19 as of September 2010. Pre-existing condition exclusions will not be allowed in adults starting in 2014.
• Does not allow insurance plans to stop coverage when a person gets sick
• Created state-run or federally run Pre-Existing Condition Insurance Plans (PCIPs) in every state to cover anyone who has not had insurance for 6 months or more and has cancer or another pre-existing condition
• Makes coverage available for patients who take part in clinical trials

To learn more, please read our brochure called The Affordable Care Act: How It Helps People With Cancer and Their Families. You can also get up-to-date information online from the US Department of Health & Human Services at www.healthcare.gov.

Avoiding identity theft and scams in the guise of health insurance

Note that scammers are using the ACA to try to get your personal information for identity theft, or to sell you fake insurance. Some even call and pose as government workers looking to “update” your information, asking for your date of birth, Social Security number, or bank account numbers. If you get such a call, notify the FTC online at www.ftccomplaintassistant.gov/ or call 1-877-FTC-HELP (1-877-382-4357). Also see “Fake health insurance” in the “Private health insurance” section.