Understanding how COBRA work

[TinkerBelleLuvr]

What is the name of your state (only U.S. law)? Florida

DURATION OF COVERAGE

COBRA establishes required periods of coverage for continuation health benefits. A plan, however, may provide longer periods of coverage beyond those required by COBRA. COBRA beneficiaries generally are eligible to pay for group coverage during a maximum of 18 months for qualifying events due to employment termination or reduction of hours of work. Certain qualifying events, or a second qualifying event during the initial period of coverage, may permit a beneficiary to receive a maximum of 36 months of coverage.

Coverage begins on the date that coverage would otherwise have been lost by reason of a qualifying event and can end when:
The last day of maximum coverage is reached
Premiums are not paid on a timely basis
The employer ceases to maintain any group health plan
Coverage is obtained with another employer group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of such beneficiary
A beneficiary is entitled to Medicare benefits

http://www.cobrainsurance.net/COBRA_Health_Insurance/COBRA_Law_Information.htm#HOW%20COBRA%20WORKS

I want to make sure that I understand this correctly. My place of employment is being sold. Our understanding is that the buyer has ZERO insurance in place; means that anyone of us who are currently covered with insurance will no longer have any.

Since our current employer will cease to exist, then the insurance will no longer be applicable. COBRA will NOT be available to any of us since the employer won't exist anymore.

#1 - am I correct in my understanding of this?

Second question: for anyone on COBRA at this time, can I safely assume that they won't have COBRA either. Could that person switch back to the COBRA they were on before with a prior insurance? I have someone who had COBRA prior to working for us and have since been laid off and offered COBRA again under our policy. I want to know if they can switch back to their old plan?

 

[ecmst12]

If the entire plan is cancelled and no longer exists, then there is nothing to continue coverage and COBRA will not be available.

Once a COBRA plan is termed, there is usually no way to re-start it. So it is unlikely that those employees will be able to go back on their previous Cobra plan, even if they are still within the 18 months that they would be allowed to have it. And even if the plan administrator DID decide to allow these employees back on the Cobra plan, they would have to pay the premiums back to the date they had termed, since there can't ever be a break in coverage on a Cobra plan. So it's not a good option.

 

[TinkerBelleLuvr]

That all stinks.

So, yes, we are all actively seeking other employment opportunities that come with insurance. Since they have given no one an incentive to stay to the end, chances of all key employees still being here is pretty low.