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Understanding Cobra Plans

What is a COBRA plan?

 

A COBRA plan is a private insurance option that gives people who may have just lost their job, time to find a new job, new insurance, and remain covered. COBRA is typically for when a patient is terminated from their job or they have to leave their job, and it is insurance that will cover in their grace period. 

 

Several events that can cause workers and their family members to lose group health coverage may result in the right to COBRA coverage. These include:

  • Voluntary or involuntary termination of the covered employee’s employment for reasons other than gross misconduct
  • Reduced hours of work for the covered employee
  • Covered employee becoming entitled to Medicare
  • Divorce or legal separation of a covered employee 
  • Death of a covered employee
  • Loss of status as a dependent child under plan rules

 

*COBRA is applicable for six months, paid out-of-pocket and acts as a buffer for insurance coverage.

How can it affect your treatment center?

If someone comes in with a COBRA plan, and they had a previous plan that you billed, then you would continue to bill them as normal. It may take a while for the coverage to kick in, and the patient may be inactive when you call the insurance company, but then they will backdate that COBRA. The claims may be denied for a bit until the COBRA coverage kicks in, but then COBRA will back date the claim. 

 

What happens if a patient stops paying the COBRA?

The claim will not get paid. COBRA gets renewed on a monthly basis, so you may want to call and check to see if they are verified under COBRA

 

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