COBRA Insurance and Leaving Employment

COBRA is the Consolidated Omnibus Budget Reconciliation Act of 1986. The law requires employers to provide continuation of group health, dental, and/or vision coverage that otherwise might be terminated due to a qualifying event for an employee, spouse or dependent.

The qualifying events for employees are:

  • Voluntary or involuntary termination of employment for reasons other than gross misconduct.
  • Reduction in the number of hours of employment.

The qualifying events for spouses are:

  • Voluntary or involuntary termination of the covered employee's employment for any reason other than gross misconduct.
  • Reduction in the hours worked by the covered employee.
  • Covered employee's becoming entitled to Medicare.
  • Divorce or legal separation of the covered employee.
  • Death of the covered employee.

The qualifying events for dependent children are the same as for the spouse with one addition:

  • Loss of dependent child status under the plan rules.

A COBRA packet is mailed to an employee within 14 days of the date that the Benefits Office is notified of a qualifying event. The law requires that this packet be sent by mail to the last known address of the employee. This packet will include an official notice, enrollment form, and current premiums.

An eligible individual has 60 days from the date of the notice to elect COBRA coverage, which is effective retroactive to the last day of coverage. The individual then has an additional 45 days from the date of COBRA election to make the first premium payment, made payable to the Public Employee Benefits Authority (PEBA).

More information about COBRA coverage can be found on the Department of Labor website.

Interim Insurance

If you are leaving employment and do not want to use COBRA insurance, interim insurance may be good option. Blue Cross Blue Shield offers the Blue Term Short-Term Health Plans for those who need coverage while between jobs or if they missed Open Enrollment with their employer. These plans are available in a variety of plan lengths and coverage levels. Blue Term plans do not cover pre-existing conditions. Enrollment is separate from PEBA and you pay the premiums directly to BCBS.

More information can be found on the Blue Term website, the enrollment page and in the Blue Term Plans Brochure (PDF). 

Leaving Employment

Employees leaving MUSC can contact their benefits counselor to schedule an appointment to discuss benefit options upon separation of employment. Employees and faculty members will complete an Exit Checklist (PDF) at the end of their employment as well as information regarding COBRA. Please also review the Leaving Employment FAQs (PDF).