How to Discontinue COBRA Benefits
COBRA prevents terminated employees from having a lapse in health insurance.
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If you took advantage of the Consolidated Omnibus Budget Reconciliation Act after quitting or losing your job, you were able to keep your health insurance benefits. Like regular health insurance, COBRA requires monthly premiums to continue coverage. However, if you want to discontinue COBRA benefits because you have a new job that offers health insurance or you cannot keep up with the premiums, there are steps you can take to stop the service.
Acquire new health insurance coverage. Whether you are applying for health insurance through a group plan at a new job or individual health insurance, don't terminate your COBRA health insurance until you have an approval date for the new insurance. This ensures that you don't have a lapse in health insurance.
Step 2Write a letter to the plan administrator of your previous health insurance to advise him of your intent to discontinue your COBRA benefits. If applicable, you can contact the human resources manager at your previous job for the plan administrator's information. You can also find the plan administrator's information on the COBRA paperwork you initially received when you started coverage. You will receive a letter from the plan administrator and/or your previous employer verifying the termination of your COBRA benefits.
Step 3Stop paying the premium for your COBRA benefits. Failing to pay the premium in a timely manner will cancel the benefits. You will be notified when your COBRA benefits are discontinued because of non-payment in the mail.
Step 4Acquire Medicare benefits. If you become eligible for Medicare after you are already receiving COBRA benefits, your COBRA benefits will automatically discontinue. However, this does not apply if your Medicare benefits started before your COBRA benefits. You can apply for Medicare when you become eligible, such as attaining the age of 65. Applications are accepted at any Social Security Office, by mail, phone or using the Social Security website. Your W-2 form from the previous year and proof of U.S. citizenship are examples of documents you need to complete the application.
References
- United States Department of Labor: FAQs For Employees About COBRA Continuation Health Coverage
- COBRAinsurance.com: Can I Cancel my COBRA coverage?
- The University of Arizona: COBRA FAQ's COBRA Continuation of Insurance Benefits
- United States Department of Labor: Continuation of Health Coverage — COBRA
- United States Department of Labor: Contact Us
- Social Security Administration: Information You'll Need When You Apply for Retirement Benefits or Medicare
Warnings
- Your COBRA benefits will also automatically discontinue if your previous employer terminates its health coverage.
Writer Bio
An avid technology enthusiast, Steve Gregory has been writing professionally since 2002. With more than 10 years of experience as a network administrator, Gregory holds an Information Management certificate from the University of Maryland and is pursuing MCSE certification. His work has appeared in numerous online publications, including Chron and GlobalPost.