COBRA and the 11-Month Disability Extension

Much of the confusion about COBRA's disability extension centers around the definition of the word "disabled". Many employers mistakenly believe that if an employee is out on "disability leave" or has been told by their Doctor they cannot work due to a disability, they are entitled to the 11 month COBRA disablilty extension.

COBRA's regulations are very clear:

Under current law, if an individual is entitled to COBRA continuation coverage because of a termination of employment or reduction in hours of employment, the plan generally is only required to make COBRA continuation coverage available to that individual for 18 months. However, if the individual entitled to the COBRA continuation coverage is disabled (as determined under the Social Security Act) and satisfies the applicable notice requirements, the plan must provide COBRA continuation coverage for 29 months, rather than 18 months. If the individual entitled to the disability extension has non-disabled family members who are entitled to COBRA continuation coverage, those non-disabled family members are also entitled to the 29 month disability extension.

Note the highlighted text:  as determined by the Social Security Act. In other words, the individual must be determined to be disabled by the Social Security Administration on or before the 1st 60 days of COBRA coverage. A determination by a doctor is not sufficient.

Planning Pointer: Before granting the 11 month COBRA disability extension, make sure you have a copy of the Social Security determination letter. This letter will contain the date the individual became disabled.  The plan is permitted to charge 150% of the applicable premium during the extension.

Sample Application for Disability Extension (for use by disabled individual)