COBRA Health Insurance
Job loss can be devastating, especially for those with existing health needs who lose employer-sponsored insurance. For many, this adds stress during an already uncertain time. COBRA coverage is a short-term solution for individuals and their dependents until they can secure a Marketplace insurance plan through Open Enrollment, a Special Enrollment Period, or new employer’s policy, ensuring they can manage ongoing conditions and address new health needs without accumulating significant medical debt.
What Is COBRA Insurance?
Who Does COBRA Cover?
COBRA covers the employee who was previously enrolled in the workplace policy and extends to their qualifying family members. This may include a spouse, former spouse, or dependent children. Thanks to COBRA’s flexibility, these individuals may qualify for COBRA coverage even if the former employee doesn’t sign up for it.
COBRA Eligibility
To qualify for COBRA:
- The person must have received health insurance through an employer-sponsored plan
- The former employer must employ at least 20 employees on more than 50% of their days of operation in the previous calendar year and offer COBRA-eligible coverage
- A qualifying event must occur, such as losing a job (for reasons other than gross misconduct) or reducing work hours, divorce or legal separation, death of the employee, or a child turning 26
COBRA Insurance Availability
COBRA health plans generally last the minimum legal requirement of 18 months, though some may extend to 36 months in certain circumstances. Family members and dependents may continue coverage if the covered employee passes away, for example, suffers a second qualifying event like divorce, or if the former employee becomes eligible for Medicare before their employment ends. Dependent children aging out of their guardian’s plan at age 26 may also be eligible for 36-month COBRA health insurance.
Following a qualifying event, the employer or health plan administrator must provide a COBRA election notice. Individuals then have a 60-day window to decide whether or not to enroll. Once enrolled, coverage can be backdated to the date the original insurance ended so long as plan premiums are paid.
It’s important to note that states may carry specific “mini-COBRA” laws. Qualifying individuals should speak with their former employer’s HR Department or Benefits Administrator to learn more.
What Benefits Are Covered Under COBRA?
Electing for COBRA coverage means individuals retain identical coverage to their policy before the qualifying event, including the same benefits, choices, and services.
Dental and vision coverage may also be continued if they were available in the original group health plan.
Steps for Securing COBRA Coverage
🩺 How to Get COBRA Coverage
In most cases, COBRA is paid in full by the individual. Former employers may also charge an administrative fee up to 2% of the health insurance premium. COBRA is more expensive than job-based coverage, though it prevents lapses in coverage and allows individuals to continue care with the same in-network healthcare professionals.
FAQs
What happens if COBRA isn’t chosen in time?
COBRA coverage is no longer available if the 60-day deadline is missed. Individuals must pursue Health Insurance Marketplace policies through Open Enrollment or a Special Enrollment Period. Those with low-income may qualify for Medicaid, and children may qualify for Children’s Health Insurance Program (CHIP) policies.
Can COBRA be dropped early?
COBRA coverage can be canceled at any time for any reason. Simply provide a written notice of cancellation to the plan administrator. This is common when individuals secure a Marketplace plan or coverage through a new employer.
What if the employer goes out of business?
If the company’s group health plan ends entirely, COBRA coverage may not be available. In the absence of COBRA, individuals should secure a short-term temporary plan for Marketplace coverage. Some circumstances, such as corporate bankruptcy or state-specific COBRA laws, may allow for continued coverage in special cases.
Can continuation of coverage be terminated?
Missed payments of COBRA premiums can result in coverage termination. Covered individuals usually have a 30-day grace period after a missed payment to catch up. Fraud or misconduct may also lead to termination, and those entitled to Medicare benefits may lose COBRA coverage.