COBRA gives you the right to choose to keep your health insurance coverage at the employer's group rates, but you usually pay much more than you paid while employed. In most cases, you can keep the insurance for up to 18 months. Some people may be able keep it a few months longer.
COBRA is available when insurance coverage is lost due to certain "qualifying events," such as stopping work, reducing work hours, divorce or legal separation, the covered person becoming entitled to Medicare, a dependent child no longer considered to be dependent according to the terms of the plan, or the death of the employee.
How long COBRA allows people to keep their group medical insurance depends on the qualifying event. For example:
- Up to 18 months of coverage is allowed if you stop working or reduce the number of hours you work.
- 29 months of coverage is possible if a beneficiary is considered disabled. (This determination of disability is made by the Social Security Administration.)
- 36 months of coverage is available for the spouse or child in cases of divorce or legal separation, the covered person becoming eligible for Medicare, death of the employee, or when a dependent child is no longer considered to be a dependent.
COBRA is not provided automatically but must be chosen by the former employee within 60 days of getting the written COBRA "election notice" (this is not always within 60 days of when you stopped working). The employer must notify an employee in writing that COBRA is available after work is stopped or hours are reduced.
But there is also a deadline for notifying the plan administrator of the qualifying event, which varies according to the qualifying event. Whose responsibility it is to notify the plan administrator also depends on the qualifying event. In cases of family changes, the beneficiary must do it, as in these situations:
- Divorce
- Legal separation
- An employee's child reaches the status of non-dependent
This means it may be the employee, the employee's spouse, or the employee's adult child who needs to notify the plan administrator of the qualifying event. If this notice is not done within the deadline, the spouse or child may lose their COBRA rights. But if a family member gets COBRA due to one of these changes in family situation, it can be extended to 36 months. Contact the employer's human resources person, your insurance company, or check your policy to find out the details of what must be done and who should do it.
You can keep your health insurance if the premium is paid, and until the person becomes covered under another group policy, up to a certain time limit. Premiums cannot be more than 102% of the cost of the plan for employees in similar situations who have not had a "qualifying event." COBRA coverage may be lost if you go above the limits of the coverage, your former employer stops offering all health plan coverage, or you become entitled to Medicare after you choose COBRA.
COBRA is administered by the US Department of Labor and they can give you more detailed information about how it works. (See the section called "To learn more") Families often are concerned about being able to pay the premium for COBRA. If this is the case, talk to your team social worker who may have suggestions about how to help with these costs.
For more information, read our document, What is COBRA?
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