Alabama Health Insurance Plan and Consolidated
Omnibus Budget Reconciliation Act of 1986 (COBRA)
insurance Plan is designed for people who have exhausted coverage through a
group plan and are not eligible for other group coverage, Medicare, Medicaid or
are covered under any other
insurance plan. Administered by the State of Alabama, AHIP offers a
traditional indemnity policy (Blue Cross) and a
care policy (United Healthcare) to residents of the state of Alabama who
meet certain qualifications.
Created by state law, AHIP is designed to meet the
standards of the Health Pnsurance Portability and Accountability Act (HIPAA) of
1996. HIPAA is a federal law that helps make
insurance available to anyone who has been enrolled in a
insurance plan. However, your last month of prior coverage must have been
through a group employer plan or
If you are eligible for AHIP you will have no waiting periods for
COBRA What Is COBRA
and How Do I Use It?
COBRA is the abbreviation for
Consolidated Omnibus Budget Reconciliation Act of 1986. This federal law
requires employers (including self-insured employers) with 20 or more employees
to offer continued coverage to a former employee and his or her dependents for
up to 18 months after the employee has left the company.
an employee's death or divorce, the employee's family has the right to continue
coverage for up to 3 years.
COBRA requirements do not apply
to group health plans established or maintained by the federal government or to
church plans that are set up by churches, which are tax exempt under Section
501 of the Internal Revenue Code. When can you choose to continue
using your former employer's group health insurance?
You have the option to use your former employer's
health plan if you have a "qualifying event" that results in the loss of
coverage. Examples of qualifying events include the following scenarios.
How long can you or your dependents
continue group health coverage?
- You quit work or are laid off, retire, or are fired
(not for gross misconduct).
- Your hours are reduced so you no longer qualify for
the group plan.
- You are legally separated or divorced.
- Your child no longer qualifies as a dependent under
your employer's plan.
- You die (a qualifying event for your family).
- You become eligible for, or enrolled in, Medicare
(a qualifying event for your family).
The period of time you can continue with group
coverage depends on your needs to extend coverage outside your employer's or
former employer's health plan benefits.
Type of Individual
Length of Continued Group Health
Coverage Under COBRA
Former employee and his/her spouse and
Up to 18 months
Disabled employee and his/her spouse and
Up to 29 months
Dependent child who is disabled or becomes
disabled within 60 days of being off group health coverage
Up to 29 months
Children no longer qualifying as a dependent
(dependent age limits vary from 19 to 25 years of age)
Up to 36 months
Spouse who is legally separated, divorced, or
Up to 36 months
Dependent children living with spouse who is
legally separated or divorced
Up to 36 months
Dependent children of a deceased
Can continue until they no qualify as
How do you sign up for continuation coverage?
Your employer is required to provide you with
information on electing to continue coverage if you are fired, laid off, or
retire. The information will tell you how to make this election and how much it
Under federal law, you must receive this information
from your employer within 44 days of when a qualifying event takes place. The
information will be sent to your home.
Federal law gives you 60 days from the date that the
informational notice is received or coverage would otherwise end to elect
continuation coverage. You have the right to initially refuse continuation
coverage and then change your mind before the 60-day election period ends.
If you elect coverage within the 60-day period and pay
the applicable premiums, your coverage will be retroactive to the date of the
qualifying event. The first
premium is due
within 45 days after you elect continuation coverage. Federal
COBRA provides a
30-day grace period to pay the remaining monthly premiums.
How much will it cost to continue group
Your employer can charge you 100% of the
premium plus a
2% administrative cost.
A child who no longer qualifies as a dependent will be
charged no more than 102% of the total cost for an individual covered under the
A person who becomes disabled while on continued
coverage cannot be required to pay more than 150% of the total health plan
costs for a similarly situated person for months 1929.
Can continued group coverage be lost?
Yes, there are situations in which you can lose your
continued group coverage, such as the following scenarios.
- Your former employer stops offering group health
- You fail to pay the
- You attain
insurance through another group health plan.
- Your coverage is with a health maintenance
organization (HMO), and you move outside of the
Where can I find more information?
For more information on
the U.S. Department of Labor.
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