See how COBRA coverage can work for you.
When you have a job change, you might hear the term Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). It sounds complicated, but COBRA can be a big help if you need health insurance when your job changes unexpectedly.
Here’s what you need to know if you’re thinking of using COBRA to keep your insurance while you’re looking for a new job:
Qualifying for COBRA.
You can get COBRA coverage if you worked for a business that employs 20 people or more. There are exceptions to this, so you’ll need to double-check your situation to know what’s available. COBRA is only a short term insurance so you can only count on it for up to 18 months (in a few situations COBRA coverage may extend beyond 18 months).
There are two reasons why you’d qualify for COBRA coverage.
- You lost your job, either voluntarily or by the decision of your company (for any reason except gross misconduct) and you lose your health coverage;
- You had the number of hours per week you work reduced so you no longer get benefits and you lose your health coverage.
If this happens, your employer should tell you within 14 days about the COBRA1 continuation coverage that’s available to you. Then you have 60 days to decide whether to sign up.
What’s covered under COBRA.
With COBRA, you can continue the same coverage you had when you were employed. That includes medical, dental and vision plans. You cannot choose new coverage or change your plan to a different one. For example, if you had a medical plan and a dental plan, you can keep one or both of them. But you wouldn’t be able to add a vision plan if it wasn’t part of your plan before COBRA.
Paying for COBRA
Under COBRA you’ll have to pay the full premium for your coverage, plus an administrative fee. When you’re employed, your employer generally pays for some of the cost of your health insurance. That means you’ll likely be paying more for COBRA – and it can get expensive, depending on the kind of coverage you have.
COBRA coverage has limits.
COBRA coverage is only a short-term solution, so it’s a good idea to explore other options. Besides the time limit referred to above, there are a couple of other reasons your COBRA coverage can end.
- You don’t pay your premiums on time.
- Your former employer stops offering any group health plans.
- You get comparable coverage through a new job.
- You – or another person who is covered – become eligible for Medicare.
Short term health insurance might be an alternative option for COBRA.
If you’re looking for ACA plans from the Health Insurance Marketplace or have questions, call 800-980-5213.
1 Read more about COBRA health coverage from the United States Department of Labor at COBRA Continuation Coverage. Personal insurance is not the same as COBRA, so review your COBRA information carefully. Your time to elect COBRA is limited by law. Failure to elect and exhaust COBRA will eliminate HIPAA eligibility. You may have additional rights under state law.