COBRA Outlives Demise of Employer

by Patrick Mortimer

Employee Rights Attorney

Mission Viejo, California

Q: I’ve been getting medical and dental insurance through COBRA with 8 months of eligibility left. My former employer is going or has gone out of business. Will this affect my COBRA? Is he obligated to provide it regardless of going out of business?

A: “Employers providing health care insurance coverage may be governed by laws beyond COBRA, like ERISA Health Insurance Portability and Accountability Act, Small Business Job Protection Act, and California’s version of COBRA,” says attorney Patrick Mortimer, Don D. Sessions Law Corp., Mission Viejo.

“With few exceptions, most employers are required to provide continued access to the employer’s group health care insurance coverage to qualified individuals no longer working for them, and qualified family members at their expense. Once you accept these benefits, you’re covered by the employer’s group policy at no more than 102 percent of the group rate and generally without cancellation worry.

“Generally, the right to participate in the employer’s group health care insurance coverage to qualified individuals no longer working for them, and qualified family members at their expense. Once you accept these benefits, you’re covered by the employer’s group policy at no more than 102 percent of the group rate and generally with cancellation worry.

“Should the former employer go out of business and the group policy be terminated, you still have the option for continued health care insurance coverage, but the cost and coverage may differ. Under California law, you probably have the right to convert the group policy into an individual and/or family policy without evidence of insurability. Unlike Participation in the employer’s group policy, you will be subject to prevailing rates for your age and class of risk.”