COBRA Dental Benefits

Help Regarding Keeping COBRA Dental Coverage or Shopping for Alternatives

The Consolidated Omnibus Budget Reconciliation Act, otherwise known by its acronym COBRA, is a federal law enacted in 1985. This law provides employees working at private sector employers with 20 or more employees with the option of temporarily continuing their employer-provided group health insurance coverage after:

• Job termination (i.e. firing) except if the cause was for gross misconduct
• According to government FAQs on COBRA, termination can be voluntary or involuntary and include retirement
• Voluntary resignation (i.e. "quitting your job") can also trigger COBRA eligibility
• Reduction in hours that are below the amount that qualifies an employee for health plan participation
• Other special circumstances sometimes called "qualifying events"

Despite the rules above, if the employer providing the health coverage went bankrupt or otherwise closed, there are no COBRA protections for the employees.

An employee is qualified for COBRA protections if he or she was covered by health benefits on the day prior to the event triggering his or her COBRA protections. COBRA coverage continuing these health benefits is typically expected to last 18 months, and up to 36 months in certain cases where the individual became eligible for Medicare at the time of COBRA qualification. If an employee continues his or her health coverage through COBRA, the full cost of the insurance must be paid by the employee along with a charge of an additional two percent to cover administrative expenses related to COBRA. No premium subsidy is required to be paid by the employer.

Does COBRA Apply to Dental Benefits?

COBRA does apply to dental benefits if the employee had dental benefits prior to the event that qualified that employee for COBRA. If, on the contrary, there were no dental benefits provided to the employee previously, there will be no dental benefits made available through COBRA.

Under COBRA, an employee may continue the coverage enjoyed prior to the event triggering COBRA. The employee does not have the option to change either benefits or the plan in which the employee is enrolled. There is a 60-day window in which to apply for COBRA and the employer should give notice regarding this enrollment window. With respect to paperwork, there may be an additional enrollment process specific to dental benefits.

Will COBRA Reset My Dental Plan's Deductible and Maximum Benefit?

No. COBRA in and of itself does not affect your deductible or maximum benefit. Those features of the plan will continue to operate as they would during the coverage period continued through COBRA. If you were fired mid-year, for example, and had already satisfied your deductible, that deductible satisfaction would continue for the remainder of the plan year as it normally would. In other words, the deductible would not reset mid-year in this scenario.

Will My Dependents Still Be Eligible for Coverage under COBRA?

If dependents were covered prior to COBRA their coverage can continue under COBRA. You are not required to keep all the same dependents on coverage as there were prior to the COBRA event, but there is an election period when you define who stays on the coverage or is added. Birth, adoption, and marriage allow you to have a special election period and add new dependents while on COBRA.

Should I Consider Private Dental Coverage instead of COBRA Dental Benefits?

Yes. It depends on your dental coverage through COBRA and its costs. As mentioned previously, an employer is not obligated to subsidize a COBRA enrollee so you could pay your previous premium plus any amount that had been previously paid by the employer. Additionally, you are responsible to pay an additional two percent of the total premium cost. In other words, you pay 102 percent of the cost of coverage under COBRA. This can make COBRA coverage very expensive.

Shopping for privately-purchased dental insurance may save considerable money over COBRA dental insurance, which is especially important if you lost employment or had your hours reduced. However, if your dental benefits are integrated into your medical benefits, you may not be able to cancel them without canceling your medical benefits. Talk with your Human Resources representative about your options before making any COBRA decisions.

How Do I Find Dental Plans to Compare with my COBRA Coverage?

If you've decided that you want to compare dental insurance options you can buy on your own with your COBRA dental coverage, we provide some advice below on dental insurance shopping:

• Establish your options: You can use DentalInsurance.com to gather your local dental plan options.
• Focus on insurance acceptance: Eliminate options from consideration that are not accepted by your preferred dental practice.
• Compare premiums to your COBRA cost for dental benefits: Evaluate the difference in premiums and out-of-pocket costs and exclude the plans outside your budget.
• Evaluate breadth of benefits: Do not limit your review to the benefits offered in common by plans. Also consider the services that are NOT covered by every plan. You can use each option's Summary of Benefits or get a comparison of your local plans using our plan comparison tool where every plan has a More Details link for additional information on the scope of each plan's benefits.
• Watch out for waiting periods: Confirm that you'll have the dental services covered when you need them and do not have waiting periods that delay insurance for services you need in the near future.
• Know your maximum benefit: Review each plan's annual limit on how much it will pay toward covered dental care and treatments.

COBRA employer obligations also apply to state and local governments. COBRA does not apply to federal government health plans or the health plans sponsored by churches and related organizations.