The COBRA continuation coverage may be extended if an individual is deemed disabled by the Social Security Administration (SSA) and the individual meets certain requirements. This allows a qualified beneficiary to remain covered under COBRA until they become eligible for Medicare.

When does Medicare coverage begin?

Individuals are eligible for Medicare after a 24-month qualifying period in which they are eligible for Social Security Disability Insurance (SSDI). If a qualified beneficiary enrolls in Medicare prior to the end of the COBRA coverage period the individual loses COBRA coverage. The other family members retain coverage through the disability extension.

Qualifications for the disability extension under COBRA?

In order to qualify for the disability extension, all of the following must apply:

1. The qualifying event must be termination or reduction in hours
2. A qualified beneficiary (employee, covered spouse or dependent) must be determined to have been disabled at any time during the first 60 days of COBRA coverage
3. The qualified beneficiary must notify their administrator of the disability determination within 60 days of the latest of:
   1. the Social Security disability determination
   2. the date of the COBRA qualifying event
   3. the date of the loss of coverage due to a COBRA qualifying event
   4. the date on which a qualified beneficiary is informed (through the Plan’s SPD or COBRA General Rights Notice (aka COBRA Initial Notice) the plan’s procedures for providing the Social Security Disability Determination letter to the COBRA Administrator
4. The qualified beneficiary must notify their administrator of the determination no later than the end of the 18-month COBRA period

Who does the disability extension apply to?

The disability extension applies to everyone who is enrolled under the COBRA coverage. This would include the employee/former employee, covered spouse, and covered dependents.

How do you extend COBRA coverage?

It is important for a COBRA qualified beneficiary to pay close attention to the rules and timelines in order to be able to extend their COBRA coverage. Please refer to the COBRA Specific Rights Notice (aka COBRA Election Notice) for notification details. Generally, the qualified beneficiary will need to provide their COBRA Administrator with a copy of the SSDI letter within 60 days of receiving it or within the first 60 days of COBRA coverage, whichever is earlier. In addition, the SSDI letter must be provided to the COBRA Administrator prior to the end of the 18 months of COBRA. Failure to provide this documentation timely will result in the loss of eligibility for the coverage extension.

How long is the extension of COBRA based on a disability extension?

Individuals who qualify for the disability extension under COBRA are eligible to remain covered for a period up to 29 months starting from the loss of coverage. The extension of 11 months is above and beyond the standard 18 month COBRA duration. The extension applies to all qualified beneficiaries (all family members who had coverage under the same COBRA coverage).

Coverage can end prior to the end of 29 months if the qualified beneficiary experiences an event that results in the early termination of COBRA coverage. Depending on the event, coverage may end early for one individual, or for all family members covered.

What happens if SSA reverses the Disability Determination?

If the SSA reverses a disability determination, the qualified beneficiary must notify their COBRA administrator within 30 days of the determination reversal. The loss of disability status would result in the loss of the extension for those covered under that COBRA contract. If the qualified beneficiary is still within the first 18 months of COBRA coverage, the coverage will continue for up to the initial 18 month duration. If the qualified beneficiary is already within the 11 month extension period, coverage would end as of the first of the month after 30 days of the final determination reversal that the formerly disabled qualified beneficiary is no longer disabled.

Does the premium change under the disability extension?

During the COBRA disability extension, the plan may charge up to 150% of the applicable premium for coverage, rather than the maximum of 102% of the applicable premium charged during the first 18-months of coverage.

Bottom Line: Qualified beneficiaries should be sure to review their COBRA Rights Notice carefully to understand their rights with disability and COBRA. This notice will also provide details on the notification requirements of the qualified beneficiary.