Life Insurance and COBRA
When someone passes away, their employer-provided health insurance typically ends right away. This can create confusion for surviving spouses or family members who were also covered under that plan. Suddenly losing access to healthcare is a serious problem, especially when you are already dealing with grief and legal responsibilities. The good news is that you may have options to keep coverage going temporarily while you make other arrangements.
If the person who died had health insurance through their job, that coverage usually stops on the date of death. For dependents or spouses who relied on the same plan, this means their coverage ends too unless they take steps to continue it. Ignoring this issue can lead to uncovered medical expenses or lapses in care, but there are ways to extend coverage, at least temporarily, through COBRA (Consolidated Omnibus Budget Reconciliation Act) or other insurance programs.
Information you need to know:
What Happens to the Coverage
Once the employer is notified of the death, they typically inform the insurance provider, and the employee’s plan is terminated. Any family members covered under that plan also lose their access to benefits. However, you may have the right to continue the same coverage for a limited time under a federal program called COBRA.
How COBRA Works
COBRA allows surviving spouses and dependents to keep the same health insurance plan for up to 36 months. However, you must act quickly. The employer or their benefits administrator is required to send you a COBRA election notice within 14 to 45 days. This document outlines your rights and provides instructions on how to enroll. Be prepared, the cost of COBRA is usually much higher than what you were paying before, since the employer is no longer subsidizing the premium.
If you do not receive a COBRA notice within a few weeks, contact the employer’s HR or benefits department and request it. You can also contact the U.S. Department of Labor at 1-866-444-3272 for assistance in understanding your rights.
Other Coverage Options
COBRA is not your only choice. Losing coverage due to a death qualifies as a special enrollment event under federal law. This means you can shop for a new health plan through the federal Marketplace at www.healthcare.gov, apply for Medicaid, or possibly join a spouse’s or family member’s employer-sponsored plan. These options may be more affordable, depending on your circumstances.
If the deceased had a health savings account (HSA) or flexible spending account (FSA), these funds may also be available or need to be closed out by the estate. Consult with the employer’s benefits office or an estate attorney to ensure these accounts are handled properly.
Acting quickly helps protect your access to care and prevents gaps that can be costly.
