COBRA for Employees and Retirees

Following are answers to common questions about COBRA continuation coverage for employees, retirees and their dependents. View additional information on the COBRA Continuation Coverage webpage and the COBRA for Surviving Dependents webpage.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act of 1985. It allows you and/or your dependents to continue the health and optional insurance coverage (dental and vision) you have through the Texas Employees Group Benefits Program (GBP) for a specified period after you leave employment. This is called "COBRA continuation coverage."

Insurance coverage through COBRA is available when your GBP coverage ends because of certain qualifying life events (QLEs). These events include termination of employment, as well as divorce or the age-out of a covered dependent child.

You also may be eligible for COBRA coverage if you terminate or retire before age 65 (Medicare eligibility age) and you aren’t eligible for retiree health benefits through the GBP.

COBRA continuation coverage is limited to the health and/or optional benefits (dental and vision) you have when you leave employment.

Any eligible dependent who was covered on your health and/or optional (dental and vision) insurance on the day you ended employment may obtain COBRA continuation coverage, regardless of whether you elect coverage for yourself. As long as they were covered on the last day of your employment, your dependents can continue their insurance through COBRA coverage.

You can add an eligible dependent previously not covered during your annual benefits open enrollment period or if you have a qualifying life event (QLE), such as a birth or marriage. You must notify ERS within 31 days of the event to add the eligible dependent.

Once your agency notifies ERS of a change in your employment status, ERS mails you a COBRA notification letter, the COBRA Election Form and a rate sheet, and instructions for paying your premiums. These are sent to the address ERS has for you on file. Notify ERS of changes in your address and the addresses of your dependents.

Employees ending employment

Your active employee health and/or optional (dental and vision) coverage ends on the last day of the final month of your employment. Your COBRA Election Form (which you will receive when your employment ends) and your premium payment must be postmarked no later than 105 days from the date your active employee insurance coverage ends. Your COBRA coverage begins the first day of the month after your active employee coverage ends.

Dependents of employees ending employment 

Your dependent’s health and/or optional (dental and vision) coverage ends on the last day of the final month of your employment. Their COBRA Election Form and premium payment must be postmarked by no later than 105 days from the date your active employee insurance coverage ends.

If you aren’t eligible for retiree health benefits through the GBP and would like COBRA continuation coverage, upon retiring you must complete and return a Retiree COBRA Election Form along with the required premium payment. ERS will send you this form, along with a COBRA Notification letter and COBRA rate sheet, when your retirement is processed. Your returned COBRA Election Form and payment (see payment options on the COBRA Election Form) must be postmarked no later than 105 days from your retirement date. 

Once ERS receives your completed Retiree COBRA Election Form and premium payment, your coverage is reinstated retroactive to your retirement date. 

When you become eligible for Medicare, your eligibility for COBRA coverage ends. Remember to contact ERS when you become eligible for Medicare. ERS does not send any reminders or notifications. While you are no longer eligible for COBRA coverage, your dependents may still be eligible. 

Some retirees and their dependents also may be eligible for GBP Interim Insurance until age 65, after they have exhausted their COBRA coverage. Because premiums for Interim Insurance are higher than those for COBRA, retirees are required to choose COBRA coverage first.

You and/or your dependents can continue COBRA coverage for up to 18 months after your employment ends as long as you or your dependents do not enroll in other group health, dental or vision insurance, or do not become eligible for Medicare. 

Health maintenance organization (HMO) participants are eligible for an additional 6 months of COBRA coverage after the initial COBRA eligibility period.

If you or any of your dependents are certified as disabled, you may continue COBRA coverage for up to an additional 11 months after your initial COBRA eligibility period.
(See “Can I continue insurance after my COBRA coverage ends?” below.)

Your dependent may extend their COBRA coverage up to 36 months if a secondary qualifying event occurs during their initial COBRA eligibility period (for example, a divorce, death or loss of eligible dependent status). For these situations, COBRA coverage cannot be continued beyond 36 months.
(See “Can I continue insurance after my COBRA coverage ends?” below.)

You may be able to further extend coverage for a dependent child. Former COBRA Unmarried Child, or FCUC, refers to an unmarried dependent child over age 26 who is allowed to continue health and/or optional coverage (dental and vision) after an employees’ COBRA continuation coverage expires.
(See “What is FCUC?” below.)

If you choose COBRA continuation coverage, you will pay the full cost of your premium(s) plus a 2% administrative fee.

COBRA Rates for Plan Year 2023

(Sept. 1, 2022 - Aug. 31, 2023)

Rates include 2% administrative fee.

Health Insurance

Plan You Only You & Spouse You & Child(ren) You & Family
HealthSelect of Texas® $635.05 $1,365.37 $1,124.04 $1,854.36
Consumer Directed HealthSelectSM $589.15 $1,237.06 $1,007.78 $1,701.58

If you are a tobacco user, tobacco-user premium is added to your health premium cost.

Dental Insurance

Plan You Only You & Spouse You & Child(ren) You & Family
DeltaCare® USA DHMO $8.80 $17.61 $21.13 $29.92
State of Texas Dental ChoiceSM $29.30 $58.61 $70.33 $99.63

Vision Insurance

Plan You Only You & Spouse You & Child(ren) You & Family
State of Texas VisionSM $4.70 $9.40 $10.11 $14.81

Tobacco-user Premium

Tobacco-users of Any Age and Adults Who Fail to Certify Member or Spouse or Children* Only Member + Spouse or Member + Children* or Spouse + Children* Family (Member + Spouse + Children*)
Monthly Tobacco-user Premium $30 $60 $90

*The charge for a child is the same regardless of how many children in the household use tobacco or how many covered children age 18 or over are not certified.

COBRA Rates for Plan Year 2022

(Sept. 1, 2021 - Aug. 31, 2022)

Rates include 2% administrative fee.

Health Insurance

Plan You Only You & Spouse You & Child(ren) You & Family
HealthSelect of Texas® $634.22 $1,363.60 $1,122.55 $1,851.93
Consumer Directed HealthSelectSM $588.32 $1,235.34 $1,006.33 $1,699.26

If you are a tobacco-user, a tobacco-user premium is added to your health premium cost.

Dental Insurance

Plan You Only You & Spouse You & Child(ren) You & Family
DeltaCare® USA DHMO $9.78 $19.56 $23.48 $33.24
State of Texas Dental ChoiceSM $28.59 $57.18 $68.62 $97.21

Vision Insurance

Plan You Only You & Spouse You & Child(ren) You & Family
State of Texas VisionSM $4.70 $9.40 $10.11 $14.81

Tobacco-user Premium

Tobacco-users of Any Age and Adults Who Fail to Certify Member or Spouse or Children* Only Member + Spouse or Member + Children* or Spouse + Children* Family (Member + Spouse + Children*)
Monthly Tobacco-user Premium $30 $60 $90

*The charge for a child is the same regardless of how many children in the household use tobacco or how many covered children age 18 or over are not certified.

When determining your monthly premium for continuation coverage under COBRA, note the following:

  • If only one dependent child is continuing coverage, the child is the COBRA applicant. Pay the “You Only” rate.
  • If multiple children are continuing coverage, the youngest child is the COBRA applicant. Pay the “You & Child(ren)” rate.
  • If only a dependent spouse is continuing coverage, the spouse is the COBRA applicant. Pay the “You (COBRA Applicant) Only” rate.
  • If the spouse and child(ren) are continuing coverage, the spouse is the COBRA applicant. Pay the “You & Child(ren)” rate.
  • If only a surviving spouse or ex-spouse is continuing coverage, the spouse is the COBRA applicant. Pay the “You Only” rate.
  • If a surviving spouse and children or ex-spouse and children are continuing coverage, the spouse is the COBRA applicant. Pay the “You & Children” rate.

Extending COBRA Coverage

Secondary Qualifying Events

The initial 18-month period of COBRA coverage may be extended up to 36 months for your dependents in the event of death, divorce or the loss of status as a dependent child during their initial COBRA eligibility period. For these situations, COBRA coverage cannot be continued beyond 36 months.

Adding New Coverage for a Dependent

You can add eligible dependents gained through a qualifying life event (QLE), such as a birth or adoption, during your annual benefits enrollment period or within 31 days of the QLE.

Disability Extension

If you or any of your dependents are certified as disabled (Title II or XVI), you may continue COBRA coverage for up to an additional 11 months. If you think you or your dependents qualify for this extension, send ERS a copy of your Social Security Administration Notice of Award letter including the date that the disability began (the disability date needs to include the month, date and year to be reviewed).

COBRA Coverage for Unmarried Children

If you have an unmarried dependent child, they may be eligible to extend their COBRA continuation coverage beyond the initial COBRA eligibility period. For more information, contact ERS toll-free at (877) 275-4377, TTY: 711.

Mail your COBRA election form and payment to ERS. Payment must be by check or money order payable to GBP. ERS will not send a bill or reminder notice. Your initial COBRA premium payment is due within 105 days of the date your employee coverage terminated, or the date of your COBRA Notification letter, whichever is later. Subsequent premium payments are due on the first day of the coverage month.

Your monthly premium payment must be postmarked within 30 days of the due date or your coverage will be automatically cancelled retroactive to the last day of the month that ERS received a full premium payment that was not considered delinquent. ERS will notify you in writing if your coverage is cancelled.

If you receive an annuity from ERS, your monthly premium is automatically deducted from your monthly annuity payment as long as your annuity is sufficient to cover the deduction. Depending on when you elect your COBRA coverage, you may need to send ERS a premium payment before we can begin automatically deducting the monthly payment from your annuity. 

If you do not receive an annuity you can elect to have your premiums automatically deducted through a bank draft. Complete the Automatic Withdrawal/Cancellation of Insurance Premiums form and return it to ERS. Depending on when you elect your COBRA coverage, you may need to send ERS a premium payment before we can begin automatically deducting the monthly payment from your account.
 

Yes, you can ask your health, dental and/or vision plan administrator about a private policy after your insurance under COBRA ends. ERS will notify you 45 days before your COBRA coverage ends. At that time, contact your plan administrator for specific information about another policy. You can also check options available through the Health Insurance Marketplace at www.HealthCare.gov.

Extension due to disability

If you or a dependent is certified as disabled under Title II or XVI of the Social Security Act before or during the first 60 days of COBRA continuation coverage, you may continue COBRA coverage for up to 11 months beyond the 18 months of initial COBRA coverage. If you think you or your dependent(s) qualifies for this extension, send ERS a copy of your Social Security Administration Notice of Award letter during the first 18 months of COBRA continuation coverage. The letter must include the disability onset date (month/date/year) to be reviewed.

The premium for disability participants who extend their coverage beyond the initial 18 months of COBRA coverage is calculated at 150% of the current group rate.

Extension due to secondary qualifying event

The initial 18-month period of COBRA continuation insurance may be extended to 36 months for your dependent(s) if a secondary qualifying event (such as death, divorce or the loss of status as a dependent child) impacts the status of the covered dependent. 

If you are receiving COBRA continuation insurance as a retiree, but you don’t turn 65 (for Medicare eligibility) before your COBRA coverage expires, you are eligible for Interim Insurance through the GBP.
Note: You must meet service criteria for retiree health insurance coverage through the GBP to be eligible for Interim Insurance. Because premiums for Interim Insurance are higher than those for COBRA, retirees are required to choose COBRA coverage first.

Interim Insurance coverage is available until you are eligible for retiree health insurance coverage at age 65. Interim insurance is only available through HealthSelect of Texas and evidence of insurability is not required. You pay the total actuarial cost of coverage.

ERS may cancel COBRA continuation coverage before the expiration date if: 
  • ERS does not receive a timely premium payment.
  • You are not eligible for Group Benefits Program (GPB) coverage, and therefore are not eligible for COBRA coverage.
  • You become covered under another group health and/or dental or vision plan before your COBRA continuation coverage expires. Exception: Your coverage in the other group plan includes a limitation or exclusion for pre-existing conditions. (See “What if I become covered by another health plan or Medicare while I have COBRA continuation coverage?” below.) Otherwise, your COBRA coverage ends when your coverage through the other group health plan coverage begins. 
  • You begin receiving Medicare benefits.
  • You extend coverage due to a disability, but later begin receiving Medicare benefits, or, the Social Security Administration (SSA) determines that you no longer qualify for coverage due to a disability.
  • You request that your coverage be cancelled. Your coverage is cancelled effective the last day of the month in which you request the cancellation. You must pay your full premium for the month. Once you request to cancel your COBRA continuation coverage, it cannot be reinstated.

Your right to COBRA continuation coverage ends if you become covered by another group health plan or you begin receiving Medicare benefits. 

Your COBRA coverage will be cancelled retroactive to the last day of the month before the month your other coverage begins. This includes coverage through another group health and/or dental or vision plan or Medicare. You are responsible for letting ERS know when you enroll in another group health and/or dental or vision plan or begin receiving Medicare benefits.

Exclusion periods for pre-existing conditions
Most employer health insurance plans with plan years that begin on or after July 1, 1997, are subject to HIPAA (Health Insurance Portability and Accountability Act of 1996). HIPAA includes limits on excluding coverage for pre-existing conditions.

If your new group health plan has an exclusion period for pre-existing conditions, and this period extends beyond the date you are covered through COBRA, your COBRA coverage will not be terminated until after this exclusion period ends. To continue COBRA coverage, you must provide documentation showing: 

  • the other plan’s provision about the exclusion period for pre-existing conditions, 
  • the effective date of coverage for each person that is covered by the other group health plan and
  • services that were provided during the exclusion period for each person covered by the other group health plan (such as medical or prescription billings). 

Your COBRA coverage is cancelled on the last day of the month in which the pre-existing condition exclusion period for the new plan period expires. For example, if the exclusion period ends May 15, your COBRA coverage would be cancelled on May 31.

The exclusion period for pre-existing conditions may be reduced if you show you had “creditable coverage” through your prior health plan. Creditable coverage is insurance coverage you had previously with no break for more than 63 days. The time that you had this prior coverage is applied month-for-month to your new plan’s pre-existing condition exclusion period. If you become covered by a new group health plan with a pre-existing condition exclusion clause that is satisfied by this creditable coverage provision, your COBRA continuation coverage may be terminated because you have other coverage.
 

Your COBRA coverage continues until the end of the month that you return to work. You must pay the full COBRA premium for the month you are rehired. You are eligible for active employee benefits starting the month following your rehire date.

Note: New employees covered through the GBP are subject to a waiting period with their employer. If you do not pay the full COBRA rate for the month you are reemployed, ERS will cancel your COBRA continuation coverage.

FCUC, or Former COBRA Unmarried Child, refers to an unmarried dependent over age 26 who is allowed to continue health, dental, and/or vision coverage after the initial COBRA continuation coverage expires. 

Covered dependents who turn 26 years old are no longer eligible for coverage under the GBP. They are eligible for up to 36 months of COBRA continuation coverage. After 36 months of coverage, if your dependent is not married, he or she may be eligible for health, dental and/or vision coverage indefinitely as a Former COBRA Unmarried Child.

Coverage as a FCUC ends when the dependent: 
  • marries,
  • enrolls in other group health insurance coverage, for instance as an employee,
  • stops paying premiums or 
  • requests the coverage be cancelled.
One month before your child's COBRA coverage expires, ERS will mail you an Insurance Enrollment Application for Former COBRA Unmarried Children. To enroll, complete the form and mail it to ERS before the COBRA coverage expires. Participants are required to certify their unmarried status.