Among the benefits that American workers receive, one of the most important options is COBRA insurance. COBRA allows workers to keep their healthcare coverage in case they experience a qualifying event that may cause them to lose coverage. For more information about COBRA insurance, see the following COBRA FAQs.
What is COBRA?
Now over three decades old, the Consolidated Omnibus Budget Reconciliation Act (COBRA) passed in 1985 allows people to keep their employer’s group health plan coverage if they experience a qualifying event that causes them to lose coverage.
Does my company offer COBRA insurance?
Generally, COBRA insurance is required for private-sector businesses (with a group health plan) that employ at least 20 people for more than half of its business days during the previous calendar year. COBRA also applies to group health plans sponsored by most state and local governments. Plans sponsored by the Federal Government are exempt from COBRA, as are plans sponsored by churches and some church-related organizations.
What is a qualifying event?
A qualifying event that typically results in loss of coverage includes:
- Job loss (for reasons other than gross misconduct)
- Reduction in work hours
- Divorce or legal separation from the covered employee
- Covered employee becomes eligible for Medicare
- Death of the covered employee
Am I eligible for COBRA?
To be eligible for COBRA, you must have been covered under your employer’s group health plan before you had a qualifying event. Spouses and dependent children are also eligible if they were covered under the same group plan prior to the qualifying event.
Do I have to elect COBRA?
No. You may shop around for other insurance, including on exchanges setup through the Affordable Care Act (ACA).
What benefits are covered?
Under COBRA, you can receive the same health plan coverage that is available to active employees and their families. This is usually the same coverage you had prior to the qualifying event.
Can I keep some coverage but decline others?
Yes. As long as you (and your dependents, if applicable) were covered under specific plans (health, vision, dental) before the qualifying event, you can choose which coverages to keep. You could keep health only, or vision and dental, or any combination.
Can I choose who keeps coverage and who doesn’t?
Yes. You can decide to keep only yourself on the plan, or your dependents, or a combination. Remember, the covered individuals must have been on the plan before the qualifying event.
Is there a time limit on electing COBRA?
Yes. Your employer must give you at least 60 days to make a decision whether or not to choose continuing coverage.
If I waive COBRA coverage, can I change my mind and elect it later?
Yes – as long as it is within the election period. You have to revoke the waiver, and your coverage begins on the date you revoke the waiver.
How long does COBRA coverage last?
You can have COBRA coverage for up to 18 months. Under certain circumstances, some beneficiaries may qualify for an 18-month extension (total of 36 months).
How much does COBRA insurance cost?
Cost varies by plan. However, it cannot exceed 102 percent of the total cost for those who did not have a qualifying event and have similar coverage.
(Note: If the company subsidizes premium costs, then ‘total cost’ includes both the portion previously paid by the company and the portion paid by the employee.)
Who pays for continuation coverage?
You (or your dependents) pay for continuing coverage.
My company closed and there is no longer a health plan. Can I get COBRA insurance?
If the health plan does not exist, COBRA is not available. Union members covered by a collective bargaining agreement that provides for medical coverage may be entitled to continuing coverage.
For more information on COBRA insurance, visit the US Department of Labor page on COBRA FAQs.