- Covering the costs of cancer treatment
- Private health insurance options
- Types of private health plans, and what you must pay
- Other things to know about health insurance
- Getting answers to insurance-related questions
- Keeping records of insurance and medical care costs
- When you have problems paying a medical bill
- Handling a health insurance claim denial
- Keeping employer-sponsored health insurance coverage
- COBRA (Consolidated Omnibus Budget and Reconciliation Act of 1986)
- The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
- The Family and Medical Leave Act of 1993
- The Americans With Disabilities Act of 1990
- Government-funded health plans
- Who regulates insurance plans?
- Health insurance options for the uninsured
- Financial issues: Getting help with living expenses
- Getting money from life insurance policies
- Other sources of financial help
- Disability benefits
- To learn more
COBRA (Consolidated Omnibus Budget and Reconciliation Act of 1986)
COBRA gives you the right to choose to keep your health insurance coverage at the employer’s group rates. Because the employer usually covers a portion of the plan cost when you’re employed, 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.
The new health care law now offers another option besides COBRA. Most people can purchase new coverage through health insurance marketplaces (which may have different names in different states and are also called “exchanges”.) The marketplace plans may offer more affordable coverage options for you and your family than an employer plan through COBRA. Even if you lose your job at a time the marketplace does not have open enrollment, you have 60 days in which you can buy a marketplace plan. See “Enrolling in a marketplace plan” in the “Private health insurance options” section for details.) This is more important to people who make less money, since they may be able to get financial help in the marketplace to pay for their insurance coverage. However, it’s important to know that if you start using COBRA, you will have to wait until the next open enrollment on your state marketplace plan before you can enroll there.
COBRA is available when insurance coverage is lost due to certain qualifying events. These events are:
- Stopping work
- Reducing work hours
- Divorce or legal separation
- The covered person becoming eligible for Medicare
- A dependent child no longer considered to be dependent according to the terms of the plan
- 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 the insured person 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.
If a person is fired for gross misconduct, he or she is not eligible for COBRA.
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. If you elect to keep your insurance through COBRA during that 60 days, it will retroactively cover you back to the date your insurance ended.
But there’s also a deadline for notifying the plan administrator of qualifying events that don’t directly involve the employer, 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, one of the insured people must do it, as in these situations:
- 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 a qualifying event. If this notice is not given within the deadline, the spouse or child may lose their COBRA rights. But if a family member gets COBRA because of 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 1) if the premium is paid, 2) until the person becomes covered under another group policy, and 3) 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 (which can only happen if your plan is grandfathered), your former employer stops offering all health plan coverage, or you become eligible for Medicare after you choose COBRA.
COBRA is administered by the US Department of Labor and they can give you more details on how it works. (See the section called “To learn more.”) Families often are concerned about being able to pay the premiums 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?
Last Medical Review: 02/16/2015
Last Revised: 02/16/2015