COBRA

COBRA

Most workers have at least heard of COBRA—The Consolidated Omnibus Budget Reconciliation Act. Most likely, it was when they left or lost their job and needed to continue their health insurance coverage. COBRA gives certain employees and their families a temporary extension of health insurance coverage at group rates. It applies to certain qualifying events—loss of job, job transition or reduction, divorce, death of the employee, or certain other life events. Most, but not all, employers are obligated to provide COBRA coverage. It should be noted that job loss does not cover all forms of job loss—it won’t cover gross misconduct while working.

How long does it last?

Depending on the situation, the temporary extension of coverage can last from 18 months to 36 months. Job-related issues get you 18 months; while divorce, separation, death of your spouse, or a young adult losing coverage because he’s no longer a dependent can get 36 months.

Coverage applies to employers with 20 or more employees. The extended coverage is done under group rates, which may be more or less than you were paying originally. If you lose your job due to an involuntary termination of employment, you may qualify for a partial subsidy of the cost of your COBRA-extended insurance.

Everyone has responsibilities

All parties involved have responsibilities to each other. You as an employee must provide timely notification of a qualifying event in your life. Also, you have 60 days after the qualifying event to get your COBRA coverage. The employer must notify the health insurance plan of a qualifying event involving the employee. The health plan itself must explain your rights under COBRA.

As stated earlier, coverage varies. In the case of disability, you can get up to 11 months of coverage beyond the original 18, provided that you meet certain requirements.