You're right to continue health coverage as an employee of a Texas-based company.
The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Texas Health Insurance Continuation law provide workers the ability to maintain their employer-sponsored health insurance coverage for themselves and their families even after they lose their job under certain conditions. Insurance coverage can be extended for as many as 1 to 3 1/2 years, depending on whether the beneficiary is the primary or secondary person(s) covered by the plan. COBRA and the Texas law are designed to work together with state law affording participants some additional advantages.
Coverage Continuation
The Texas Health Insurance Continuation Law is designed to extend coverage beyond the limits of COBRA. Under COBRA, a primary plan holder can continue his coverage for up to 18 months and a secondary plan holder can continue hers for as long as three years. The Texas law extends these coverage limits an additional six months for both primary and secondary plan holders.
Eligibility
A person who loses their job is entitled COBRA coverage unless termination was for gross misconduct in which case, they're not eligible.
COBRA only applies to companies with 20 or more employees, so if you worked for a small company with fewer than 20 employees, you're not entitled to continue your health insurance under federal law.
Luckily, Texas law provides that all companies offering health insurance, regardless of their size must extend continuation rights to separated employees for six months unless termination was due to gross misconduct. So, all employees with employer-sponsored coverage in Texas are required to receive a minimum of six months of health insurance continuation if separated from their employer.
Disclosure
Federal and state laws state that the employer must completely disclose your rights, as a separate employee, to health insurance continuation of coverage within 30 days of termination. You then have 60 days to decide whether to continue your coverage.
Benefits
It's important to understand COBRA and the Texas law only enables you the right to continue to receive coverage under your former employer's plan, but the he's no longer responsible for paying his portion of the premium.
It's now solely up to you, as the unemployed worker, to pay the entire premium. Although you may be paying more out-of-pocket for coverage, it's likely less than what you can expect to pay for an individual insurance plan on the private market.
Costs
In addition to paying the employer portion of your health coverage, the employer also has the right to add up to a 2 percent surcharge to cover administrative costs he incurs from extending coverage to you. However, it's illegal for an employer to try to make a profit from extending continuation of coverage to employees under federal and state laws.
Disclaimer
You can contact the Texas Department of Insurance if you feel your employer hasn't made you aware of your health insurance continuation rights.
