When disability occurs during or shortly
after employment, a participant in an employer-sponsored group health plan is entitled to 29 months of “continuation”
coverage as a participant in the group plan (consisting of 18 months of regular continuation coverage followed by a “disability
extension” of that coverage for an additional 11 months). This is also
known as COBRA coverage, after the federal law which first mandated that such coverage be provided.
A return to work can result in the termination
of COBRA coverage in two basic ways. First, COBRA coverage may be terminated
if Social Security determines that an individual is no longer disabled while coverage is being provided as a result of the
11-month disability extension. Second, COBRA coverage may be terminated once
an individual is covered under a new employer-sponsored group plan as a result of return-to-work activities. However, COBRA coverage may continue during any period under the new plan that coverage is limited by a
pre-existing condition exclusion.
“Conversion” coverage refers to individual coverage available to a participant
in a group plan after group coverage or COBRA continuation coverage ends. Disabled
individuals frequently elect such coverage to be available and provide supplemental benefits when Medicare starts, since COBRA
coverage terminates when an individual becomes eligible for Medicare. Holders
of conversion policies should be aware that such policies frequently contain provisions which terminate coverage once an individual
is covered, or becomes eligible for coverage, under another employer-sponsored group health plan. 