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 may 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 may be looking for a new job.
Qualifying for COBRA
You may qualify for COBRA coverage if your job situation has changed in one of these ways:
- You lost your job, either voluntarily or by the decision of your company (for any reason except gross misconduct) and you have lost your health coverage
- You had the number of hours per week you work reduced so you no longer get benefits and you have lost your health coverage
Is COBRA an option for a furlough?
You would need to check with your employer. If your employer does not offer benefits to furloughed employees, COBRA would be an option.
However, if you are furloughed and your employer is still offering group benefits during furlough, you would not be eligible for COBRA.
In other words, if benefits are offered during furlough, COBRA is not an option. However, if your employer does not offer benefits to furloughed employees, COBRA would be an option.
COBRA timelines are extended due to COVID-19
Due to the COVID-19 National Emergency, timelines used by group health plans for continuation of health care coverage (COBRA) have been extended — starting on March 1, 2020, until sixty (60) days after the end of the COVID-19 National Emergency (the “Outbreak Period”).
Previous COBRA timelines in place before the COVID-19 National Emergency
Before recent changes due to the COVID-19 National Emergency, the following timelines applied to COBRA. (See the extended timeline information above to learn about the changes due to the COVID-19 National Emergency.)
- Within 30 days of your termination date your employer will notify your plan of the change of employment status.
- Within 14 days after your employer’s notice is received by your plan, you’ll get a letter from your COBRA administrator about the COBRA1 continuation coverage that’s available to you.
- Within 60 days, you’ll need to decide whether to sign up for health care coverage with the COBRA administrator.
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 may 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 may be an alternative option for COBRA.
Short term health insurance
Other insurance plans
- Read more about COBRA health coverage from the United States Department of Labor at COBRA Continuation Coverage. Personal or individual insurance is not the same as COBRA, so review your health insurance information carefully. Your time to elect COBRA is limited by law. Failure to elect and exhaust COBRA may eliminate your eligibility to enroll under HIPAA portability. You may have additional rights under state law.