If your disability occurred during or shortly after employment, you are generally entitled to 29 months of “continuation” coverage under your employer-sponsored group health insurance plan. This continuation coverage is generally referred to as COBRA coverage, after the federal law which first mandated that such coverage be provided. This 29 months of continued health insurance coverage is comprised of 18 months of regular continuation coverage followed by a “disability extension” of that coverage for an additional 11 months. From time to time during the economic crisis, Congress has also enacted other extensions of COBRA coverage for certain individuals (visit the Department of Labor’s website for further information).
A return to work can result in the termination of COBRA coverage in two basic ways. First, COBRA coverage may be terminated if Social Security determines that an individual is no longer disabled while coverage is being provided as a result of the 11-month disability extension. Second, COBRA coverage may be terminated once an individual is covered under a new employer-sponsored group plan as a result of return-to-work activities. In such cases, however, COBRA coverage may continue during any period under the new plan that coverage is limited by a pre-existing condition exclusion.
“Conversion” coverage refers to individual health insurance coverage that may be available to you after group employer-sponsored health care coverage terminates or COBRA continuation coverage ends. For disabled individuals, it may be advisable to elect such coverage, if available, just before Medicare starts. Since COBRA coverage terminates when an individual becomes eligible for Medicare, and since Medicare health insurance coverage may be limited in critical ways, having individual coverage in place just before Medicare starts mat ensure comprehensive supplemental benefits that complement Medicare’s coverage.
Holders of conversion policies should be aware that such policies frequently contain provisions which terminate coverage once an individual is covered, or becomes eligible for coverage, under another employer-sponsored group health plan. Consequently, a return-to-work for a new employer may inadvertently result in the loss of existing health insurance coverage. Any return to work should therefore be preceded by a careful review of all current life, health, and disability insurance policies, for any impact that these work activities will have on the coverage and benefits provided by such policies.
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