When COBRA Ends

COBRA provides that your continuation coverage may be terminated before the end of the maximum coverage period for any of the following reasons:

  • The Plan Sponsor no longer provides group health coverage to any of its employees;
  • Any required premium for continuation coverage is not paid in full on time;
  • A qualified beneficiary becomes covered — after electing COBRA continuation coverage — under another group health plan (as an employee or otherwise) that does not impose any pre-existing condition limitation for a pre-existing condition of the qualified beneficiary;
  • A qualified beneficiary becomes entitled to Medicare (under Part A, Part B, or both) after electing COBRA continuation coverage;
  • A qualified beneficiary extends coverage for up to 29 months due to disability and there has been a final determination that the individual is no longer disabled.

 The Health Insurance Portability and Accountability Act of 1996 (HIPAA) restricts the extent to which group health plans may impose preexisting condition limitations.  HIPAA coordinates COBRA’s other coverage cut-off rule (in the third bullet above) with these new limits as follows:

If you become covered by another group health plan and that plan contains a preexisting limitation that affects you, your COBRA coverage cannot be terminated. However, if the other plan’s preexisting condition does not apply to you by reason of HIPAA’s restrictions on preexisting condition clauses, the Plan Sponsor may terminate your COBRA coverage.

You do not have to show that you are insurable to choose continuation coverage.  However, as discussed above, you will have to pay all the required premiums for your continuation coverage.

The law also says that, at the end of the 18 month, 29 month or 36 month continuation coverage period, you must be allowed to enroll in an individual conversion health plan if such an individual conversion health plan is otherwise generally available under the Plan.

COBRA continuation coverage may be terminated for any reason if the Plan would terminate coverage of a participant or beneficiary not receiving continuation coverage (such as fraud).