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COBRA--Keeping Your Insurance After Your Job Ends

Will my coverage under COBRA be reduced?

Generally no, unless the former employer makes changes to the coverage offered to active employees. COBRA continuation coverage must be the same as the coverage provided to similarly situated employees and their dependents. What this means is that those eligible for COBRA are entitled to receive the same coverage that actively employed persons at the former place of employment are eligible to receive. If the former employer changes plans, then the COBRA eligible individuals are entitled to coverage under the new plan and evidence of insurability may not be required as a condition of continuation coverage. This also means that if the amount or type of coverage provided for similarly situated employees is reduced or changed, so would the coverage that COBRA eligible participants would be able to continue receiving.

Example: Prior to being laid off, Bob’s employer-provided health insurance covered Bob’s cancer treatment. Bob had medical insurance continually under his employer’s plan for five years. Bob elected to continue with COBRA coverage when he lost his job. Bob’s COBRA continuation coverage must remain the same as the coverage provided to similarly situated employees and their dependents still working for Bob’s former employer. Consequently, when Bob’s former employer discontinues dental coverage under the group plan, Bob as a COBRA participant loses dental coverage as well

Example: In the same scenario above, the employer determines that it is too expensive to provide medical insurance benefits for any of its employees anymore and decides to terminate this benefit immediately. Bob is no longer COBRA eligible—even though he may still have time remaining on his 18 month COBRA time frame-- as currently employees are no longer receiving medical insurance benefits. If there is no longer a health plan being offered, unfortunately there is no eligibility for continuation coverage under COBRA. Because of his prior “creditable coverage” before and during the COBRA period, Bob is however, protected under HIPAA and should try to find an individual insurance policy or call the Minnesota Comprehensive Health Association if he is turned down for an individual policy.