COBRA: Frequently Asked Questions
These questions and answers summarize some of the plan’s highlights. For a complete description of your benefits, please refer to the appropriate Plan Summary document in the Resource Library. If there are any differences between this information and the plan documents, the plan documents will govern.
What is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that temporarily allows you and your covered dependents to continue coverage for up to 18 months if you lose benefits for a variety of reasons (for example, when you terminate employment or start working less than 50 percent time). With COBRA, you pay the premiums for the medical, dental and vision plans in which you were enrolled at the time your employment ends.
How much does COBRA cost?
The amount charged is 102% of the total premium for your coverage. For individuals on an 11-month disability extension, the premium will be increased to 150% of the plan’s total cost of coverage. If you were receiving an MCAP subsidy, it ends the last day of the month in which your employment ends and if you elect to continue medical coverage through COBRA, your cost reflects 102% of the total premium.
In the case of a layoff only: Stanford will pay a portion of your medical coverage for the first three months of your layoff, as long as you enroll for COBRA and pay your share each month. There is no subsidy for dental or vision, so you will pay the full cost for these plans. Your MCAP subsidy ends the last day of the month in which your employment ends; MCAP is not considered part of Stanford's contribution toward your COBRA coverage.
How do I pay my COBRA premium?
Stanford’s COBRA administrator, Vita Companies, sends you a package of information describing COBRA and how it works. You send your COBRA payments to them.
Is there a deadline to elect COBRA?
Yes. Because COBRA is a federal law, you have to follow certain guidelines. If you decide to elect COBRA, you must return your COBRA Election Form to Vita Companies within 60 days from the later of:
- The date your coverage would terminate due to the Qualifying Event; or
- The date on which the COBRA Election Notice is provided
The last day of your 60-day election period is indicated on the COBRA Election Form in the packet Vita Companies mails to you. Election and payment instructions are in the Vita Companies COBRA Rights & Rules booklet included in the packet.
If you do not elect within 60 days, you forfeit your right to continue any COBRA coverage that you are eligible for pursuant to that Qualifying Event. If you have questions, contact Vita Companies at 800 424-3052 or firstname.lastname@example.org.
When does COBRA coverage start?
Your Stanford medical, dental and vision benefits stop at the end of the month in which you either terminate employment or start working less than 50 percent time and are no longer eligible for benefits. COBRA coverage begins the first day of the month following the month in which your Stanford benefits end. Until you finalize your COBRA election and make any required premium payments, you will not appear to be eligible for services in your insurance carrier’s computer database.
If I get divorced, how long can my former spouse/registered domestic partner continue medical coverage through COBRA?
Your former spouse can continue coverage under COBRA for up to 36 months. Stanford Benefits provides the same amount of continued coverage to registered domestic partners.
If I move out of my medical plan’s service area, how will this impact my COBRA coverage?
You can immediately switch to another plan that is available in your new area and continue your COBRA coverage at the new rate. Report your new address and make the plan change by contacting Vita Companies (800-424-3052); you should also update your address with Stanford by contacting your Human Resources Manager.
What happens to my health care FSA when I elect coverage through COBRA?
If you terminate employment, termination rules will be applied to your health care flexible spending account (FSA). You can choose to continue your FSA through COBRA.Whether or not you enroll in COBRA, you can submit claims for eligible expenses through April 30 following the end of the plan year, as long as the service date of the expense is before the end of the month in which you terminate.
- If carryover funds have already been credited to your Available Funds before you terminate, then the Available Funds is the amount that would be reimbursable against eligible expenses.
- If carryover funds have not been credited before your termination date, then the carryover funds will only be available if you are eligible to enroll in and pay for COBRA.
Is Cal-COBRA available after the federal COBRA coverage ends?
Cal-COBRA is only available to Kaiser and Trio HMO participants in California. It becomes available after your federal COBRA coverage ends. Contact Vita Companies or your plan if you have any questions.
Can I be enrolled in Medicare and COBRA at the same time?
If you qualify for Medicare and are also eligible for COBRA, you may be enrolled in both, depending on the order in which you enroll in them.
- COBRA rules state that if you gain other group health coverage (including Medicare coverage) after electing COBRA, you must drop medical coverage under COBRA (note: you may not be required to drop dental and vision from COBRA coverage).
- If you are enrolled on COBRA and then you enroll in Medicare (Part A and/or Part B), your medical coverage under COBRA must end, typically at the end of the month in which Medicare begins. If you have COBRA, you should enroll in Medicare, including Part B, as soon as you are eligible. It is important to note that the end of COBRA coverage does NOT open a Special Enrollment Period (SEP) to enroll in Part B at a later date. You may pay a late enrollment penalty if you wait to enroll in Part B.
- If you have Medicare coverage first (Part A only, or Part A and Part B together) and then become eligible for COBRA, you can have both Medicare and COBRA. Typically, Medicare acts as the primary payer and COBRA as the secondary payer. If you only had Medicare Part A (not Part B) while you were working, make sure to enroll in Part B before you enroll in COBRA so you do not have to cancel your medical coverage under COBRA due to Part B becoming effective after your COBRA election. (If you qualify for Medicare because you have End-Stage Renal Disease, call Social Security.)
Are there alternatives for health coverage other than COBRA?
Under the Health Insurance Portability and Accountability Act (HIPAA), if you or your dependents lose eligibility for coverage through Stanford, including eligibility for continuation coverage, you may have a right to special enroll (enroll without waiting until the next open season for enrollment) in other group health coverage. For example, if you lose eligibility for group health coverage you may be able to special enroll in a spouse's plan. A dependent losing eligibility for group health coverage may be able to enroll in a different parent's group health plan. To have a special enrollment opportunity, you or your dependent must have had other health coverage when you previously declined coverage in the plan in which you now want to enroll. You should check the timeline the other coverage requires you to act if you are going to special enroll after losing your Stanford coverage.
Losing your Stanford coverage is also a special enrollment event in the Health Insurance Marketplace (Marketplace). The Marketplace offers "one-stop shopping" to find and compare private health insurance options. In the Marketplace, you could be eligible for a tax credit that lowers your monthly premiums and cost-sharing reductions (amounts that lower your out-of-pocket costs for deductibles, coinsurance and copayments), and you can see what your premium, deductibles, and out-of-pocket costs will be before you make a decision to enroll.
Eligibility for COBRA continuation coverage won't limit your eligibility for Marketplace coverage or for a tax credit. You can apply for Marketplace coverage at HealthCare.gov or by calling 800-318-2596 (TTY 855-889-4325). To qualify for special enrollment in a Marketplace plan, you must select a plan within 60 days before or 60 days after losing your Stanford coverage. In addition, during an open enrollment period, anyone can enroll in Marketplace coverage. If you need health coverage in the time between losing your Stanford coverage and beginning coverage through the Marketplace (for example, if you or a family member needs medical care), you may wish to elect COBRA coverage. COBRA continuation coverage will ensure you have health coverage until the coverage through your Marketplace plan begins.
Through the Marketplace you can also learn if you qualify for free or low-cost coverage from Medicaid or the Children's Health Insurance Program (CHIP). You can apply for and enroll in Medicaid or CHIP any time of year. If you qualify, your coverage begins immediately. Visit HealthCare.gov or call 800-318-2596 (TTY 855-889-4325) for more information or to apply for these programs. You can also apply for Medicaid by contacting your state Medicaid office and learn more about the CHIP program in your state by calling 877-KIDS-NOW (543-7669) or visiting insurekidsnow.gov.
If you or your dependent elects COBRA continuation coverage, you will have another opportunity to request special enrollment in a group health plan or a Marketplace plan if you have a new special enrollment event, such as marriage, the birth of a child, or if you exhaust your continuation coverage. To exhaust COBRA continuation coverage, you or your dependent must receive the maximum period of continuation coverage available without early termination. Keep in mind if you choose to terminate your COBRA continuation coverage early with no special enrollment opportunity at that time, you generally will have to wait to enroll in other coverage until the next open enrollment period for the new group health plan or the Marketplace.