COBRA Glossary

Certificate of Creditable Coverage. This certificate is proof that you had coverage through a group or individual health plan. HIPAA requires group health plans, health insurance companies, and HMOs to furnish this document. It must be provided to individuals who lose coverage under an employer-provided health plan as well as individuals who elected COBRA but their coverage has ended.

COBRA. The Consolidated Omnibus Budget Reconciliation Act of 1985 gives employees and their family members who lose their health benefits due to a qualifying event the right to choose to continue group health benefits provided by their employer’s plan. Learn more on our COBRA page.

COBRA Continuant. An individual who has elected COBRA continuation of group health plan coverage and has made or is currently making timely premium payments to maintain eligibility for the coverage.

COBRA General Notice. A notice furnished to covered employees (and their spouses) at the time coverage under the plan begins. This notice informs employees of their COBRA rights and obligations under the law.

Continuation Coverage. Short-term extension of group coverage after certain events which would otherwise cause coverage under the plan to end.

Conversion Coverage. An individual policy that is sometimes offered to terminated employees or dependents who lose group coverage without providing evidence of insurability.

Covered Employee. An eligible employee who has elected coverage under the group health plan.

Creditable Coverage. All forms of comprehensive individual or group health insurance coverage, such as group, individual, Medicare, Medicaid, military, Indian Health Service, Peace Corps, Risk Pool, etc. It does not include disease-specific or limited coverage plans, such as cancer, dental, vision, or hospital indemnity.

Disability. Inability to perform all or some portion of the duties of one’s job due to a medically determined physical or mental impairment. A disability extension of COBRA benefits is limited to only Social Security disabled participants and their family members who are qualified beneficiaries. For more information, go to the Department of Labor website.

Election Notice. A notice sent to qualified beneficiaries after a qualifying event has occurred. This notice informs individuals of their rights to continue health plan coverage under COBRA. The employer and plan administrator have 44 days to provide this notice to qualified beneficiaries.

Election Period. A period during which the qualified beneficiary can elect COBRA coverage. This period usually ends 60 days after the date that group coverage ends, or if later, the date of the election notice.

FMLA. The Family and Medical Leave Act of 1993 (FMLA) is a law stating that employers must generally grant a covered eligible employee up to a total of 12 work weeks of unpaid leave during any 12-month period for one or more of the following reasons:

  • For the birth and care of the newborn child of the employee;
  • For placement with the employee of a son or daughter for adoption or foster care;
  • To care for an immediate family member (spouse, child, or parent) with a serious health condition; or
  • To take medical leave when the employee is unable to work because of a serious health condition.

The law requires an employer to maintain coverage under any group health plan for an employee on FMLA leave. The same coverage must be provided as the employee’s coverage if they had continued working. This coverage is not COBRA coverage.

Grace Period. A 30-day period following the due date (typically the first day of each month) given to a qualified beneficiary in order to make a COBRA premium payment. Failure to make a payment in full before the end of the grace period may cause COBRA coverage to end. The grace period does not apply to your initial COBRA payment.

Group Health Plan. Any arrangement that an employer creates or maintains to provide employees and their families with medical care. This care may be provided through insurance, by a health maintenance organization (HMO), out of the employer’s assets on a pay-as-you-go basis, or otherwise.

Note: Life insurance is not considered “medical care” nor are disability benefits. COBRA does not cover plans that provide only life insurance or disability benefits.

Guaranteed Issue. A requirement that health plans must permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. Except in some states, guaranteed issue doesn’t limit how much you can be charged if you enroll. Contact your state’s Department of Insurance to learn more.

HIPAA. The Health Insurance Portability and Accountability Act of 1996 and its amendments. This federal law enacted portability, accessibility, and accountability requirements for group health plans and health insurance issuers. The requirements contain provisions designed to:

  • Increase an individual’s ability to obtain health coverage at the start of a new job
  • Lower the chance of losing existing health care coverage
  • Maintain continuous health coverage when changing jobs
  • Limit the use of pre-existing condition exclusions
  • Prohibit group health plans from discriminating by denying coverage for past or present poor health

HIPAA Special Enrollment Rights. Under HIPAA, if an employee acquires a new dependent by marriage, birth, or adoption, or if an employee declines coverage for him- or herself or an eligible dependent while enrolled in other coverage (including COBRA coverage) and then later loses that coverage for certain qualifying reasons, he or she may be able to enroll him- or herself in another group health plan without having to wait until the next open enrollment period. For example, an employee and her newborn child may be eligible for special enrollment rights under her employer’s group health plan upon the birth of the child.

Individual or Family Plan (IFP). Health insurance that is sold as an individual or family policy and is independent of a group health plan. Learn more on our COBRA Alternatives page.

Initial COBRA Payment. Qualified beneficiaries who elect COBRA coverage are allowed 45 days after the date of their COBRA election (the date the completed COBRA Election Form is postmarked) to send in the first COBRA premium payment. This payment should satisfy the cost of coverage from the time that coverage would have been lost through the end of the month preceding the month that the 45-day initial premium payment deadline falls. For example, a June 1 election, based on an April 30 qualifying event and loss of group health coverage, would require an initial premium payment for May and June. It is due on or before July 15 (the 45th day after the COBRA coverage election).

Initial HIPAA Rights Notification. This notice explains special enrollment rights under HIPAA to employees and their dependents. It also details if their group health coverage has a preexisting condition exclusion, these individuals may be eligible to receive pre-existing condition credit if they previously had health insurance benefits. The notice also explains that they are currently able to enroll in the insurance program. However, if they do not enroll during their initial enrollment opportunity, they may be limiting their eligibility for the coverage.

Multiple Qualifying Event Rule. If a qualified beneficiary’s spouse or dependent child has a second 36-month qualifying event during the first 18 months of COBRA coverage (because of the covered employee’s termination or reduction of hours), this qualified beneficiary may receive up to 18 additional months of COBRA coverage (for a total of 36 months). This may be available to the covered spouse or dependent child due to:

  • Death of the covered employee;
  • Divorce or legal separation of the covered employee and spouse;
  • A covered employee’s entitlement to Medicare under Part A, Part B, or both; and
  • The loss of dependent child status under the plan.

Rules on how to give notice of a second qualifying event and the notification time period are in the employer’s Summary Plan Description (SPD).

Open Enrollment. A period during which an employer allows employees to enroll and make changes to their benefits, including health plan coverage. COBRA beneficiaries are allowed the same rights as active employees and may participate in the open enrollment process. See our Open Enrollment page for more information.

Pre-existing Condition. A medical condition that existed before the date that a new insurance policy starts.

Proof of Insurability. Proving medically that you are qualified to purchase insurance (i.e., that you are a reasonable risk for the insurer).

Premium Payments. The amount of money that qualified individuals pay for their COBRA coverage. Failure to make timely payments can result in losing coverage. More information is on our Paying for COBRA page.

Qualified Beneficiary. An individual who was covered by a group health plan on the day before the qualifying event occurred that caused them to lose coverage. Only certain individuals can be qualified beneficiaries, and the type of qualifying event determines which qualified beneficiary is eligible for COBRA coverage. In addition, a child born to, or placed for adoption with, the covered employee while covered by COBRA is a qualified beneficiary. See our COBRA Qualified Beneficiaries page for more details.

Qualifying Event. Certain events that cause an individual to lose their group health coverage. The type of qualifying event determines which qualified beneficiary is eligible for COBRA coverage because of the event and the period of time that the plan must offer continuation coverage. See our Qualifying Events page for more details.

Qualifying Event Notification. Before a group health plan must offer continuation coverage, a qualifying event must occur, and the group health plan must be notified of the qualifying event. The responsibility for providing the qualifying event notification depends on the type of qualifying event. The employer is responsible for notifying the plan administrator of:

  • Termination or reduction of hours of employment of a covered employee,
  • Death of a covered employee,
  • Covered employee’s entitlement to Medicare, and
  • Bankruptcy of the employer.

The employee or one of the qualified beneficiaries must notify the plan administrator of:

  • Divorce,
  • Legal separation, and
  • A child’s loss of dependent status under the plan.

Procedures and time limits are included in the employer’s Summary Plan Description (SPD).

Separate Election Rights. Each qualified beneficiary may independently elect continuation coverage. For example, a covered employee may decide not to elect COBRA but choose to elect coverage for a dependent child.

Summary Plan Description (SPD). A written document that gives important information about the plan. It includes what benefits are available under the plan, participants’ rights, beneficiaries under the plan, and how the plan works. COBRA rights provided under the plan are described in the SPD.

Young Adult Dependent. A dependent up to age 26 who qualifies for coverage under a parent’s group health plan.