{"id":360,"date":"2013-05-10T19:45:54","date_gmt":"2013-05-10T19:45:54","guid":{"rendered":"\/articles\/?p=360"},"modified":"2025-07-08T17:53:46","modified_gmt":"2025-07-08T17:53:46","slug":"everything-you-need-to-know-about-cobra-insurance","status":"publish","type":"post","link":"https:\/\/www.online-health-insurance.com\/articles\/everything-about-cobra-insurance","title":{"rendered":"Everything You Need To Know About COBRA Insurance"},"content":{"rendered":"

COBRA stands for Consolidated Omnibus Budget Reconciliation Act<\/em> .\u00a0 This health benefit passed by Congress in 1986 provides continuation of health coverage that might otherwise be terminated in the event of a job loss (Department of Labor).\u00a0 With full medical benefits remaining the same as the group plan, individuals and families can save money by staying on a company plan after employment ends.<\/p>\n

COBRA is something people hear about all the time, but do not actually research until they\u2019re confronted with a change in their life or career.\u00a0 That\u2019s what this guide is for!\u00a0 \u00a0Explore the great benefits of continuation coverage and learn the ins and outs of what it means to qualify for and accept this coverage.<\/p>\n

COBRA Continuation Health Coverage:\u00a0 Does the business I work for provide this benefit?\u00a0 Can Anyone Receive This Benefit?<\/strong><\/p>\n

Health care is expensive.\u00a0 Companies bundle insurance plans to save on the overall costs of employee health care.\u00a0 If a company is operating a group health plan with 20 or more employees, that company is subject to COBRA.\u00a0 If you\u2019re an employer, the 20 employees do not all have to be full time.\u00a0 Part time help is counted toward COBRA as a fraction determined by the number of hours of worked divided by the number of hours considered to be full time.\u00a0 20 is the magic number.\u00a0 The US Department of Labor states that if there are 20 employees covered under group health insurance, qualified beneficiaries can receive the group health coverage after a qualifying event if they were covered by said plan on their last day of employment.\u00a0 Just a quick recap:<\/p>\n

Company:<\/strong>\u00a0 All state and local governments, and companies with 20 or more full time employees, must provide COBRA insurance to qualifying beneficiaries.<\/p>\n

Three Types of Qualifying Beneficiaries:<\/strong><\/p>\n

    \n
  1. Employee covered by group plan on the day before qualifying event.<\/li>\n
  2. Spouse covered by group plan on the day before qualifying event.<\/li>\n
  3. Dependent child covered by group health plan on the day before qualifying event.\u00a0 Children are considered dependent if claimed on your federal income tax form.<\/li>\n<\/ol>\n

    Tip:<\/strong>\u00a0 This only describes who is eligible in the case of a qualifying event.\u00a0 See the next section and find out if that\u2019s you!<\/p>\n

    Qualifying Events:\u00a0 Who is eligible for COBRA?<\/strong><\/p>\n

    \u00a0<\/strong>Life happens.\u00a0 COBRA is a safety net for qualifying beneficiaries (explained above) experiencing a qualifying life event.\u00a0 Qualifying events are easily broken down to include employees, spouses, and children.<\/p>\n

    Qualifying Events:\u00a0 <\/strong>If you\u2019re a beneficiary and can answer yes to any of these, you qualify for COBRA Continuation Health Coverage.<\/p>\n

    \u00a0<\/strong>Employee:<\/em><\/p>\n

      \n
    • Did you voluntarily or involuntarily leave your job for reasons other than gross misconduct?<\/li>\n
    • Did you have a reduction in the number of hours worked causing loss of insurance?<\/li>\n<\/ul>\n

      Spouses:<\/em><\/p>\n

        \n
      • Did your spouse voluntarily or involuntarily terminate their job for reasons other than gross misconduct?<\/li>\n
      • Did your spouse have a reduction in the number of hours worked causing loss of insurance?<\/li>\n
      • Did your spouse become entitled to Medicare?<\/li>\n
      • Did you have a divorce or legal separation with the covered employee?<\/li>\n
      • Did your spouse pass away?<\/li>\n<\/ul>\n

        Children:<\/em><\/p>\n

          \n
        • Did you lose your dependent child status under the plan rules (no longer claimed on taxes)?<\/li>\n
        • Did the covered employee terminate employment voluntarily or involuntarily for reasons other than gross misconduct?<\/li>\n
        • Did the covered employee have a reduction in the amount of hours worked causing loss of insurance?<\/li>\n
        • Did the covered employee become entitled to Medicare?<\/li>\n
        • Did the covered employee have a divorce or legal separation?<\/li>\n
        • Did the covered employee pass away?<\/li>\n<\/ul>\n

          Hint:\u00a0 Gross misconduct includes any crime that would cause immediate termination (for example, theft).<\/em><\/p>\n

          I<\/strong>\u2019m a qualifying beneficiary with a qualifying event\u2026now what?<\/strong><\/p>\n

          After reading the previous parameters for qualification, you\u2019re most likely a little blinded by the restrictions and red tape.\u00a0 But hang in there!\u00a0 If you\u2019re going to lose coverage in the near future, get your ducks lined up and decide if you\u2019re going to use the continuation benefit for you and your family.<\/p>\n

          Interested?\u00a0 You must notify the plan administrators within 60 days<\/span> of the qualifying event and have 45 days after electing COBRA continuation coverage to pay the first premium.\u00a0 The channel for communicating COBRA interest varies between plans.\u00a0 \u00a0In the event of a reduction of hours, firing, or a voluntary exit, the employee will typically meet with Human Resources and discuss COBRA options.\u00a0 If your place of employment does not have a Human Resources department, contact the health care provider covering you on your last day of employment.<\/p>\n

          Great, I qualify for COBRA continuation coverage.\u00a0 How long does it last and when does it start?<\/strong><\/p>\n

          COBRA continuation coverage lasts 18 months and is identical to the group health plan provided before the qualifying event.\u00a0 It begins on the exact date coverage would have been lost.\u00a0 Coverage, however, is not guaranteed.\u00a0 You can lose this benefit if:<\/p>\n

            \n
          • Premiums are not paid on time<\/li>\n
          • Employer no longer provides group health plan to current employees (goes out of business).<\/li>\n
          • After COBRA election, beneficiary becomes entitled to Medicare benefits.<\/li>\n<\/ul>\n

            Divorce:<\/strong>\u00a0 If, while claiming COBRA continuation benefits, there is a divorce, the divorced spouse that would otherwise lose coverage can remain on the plan for a maximum of 36 months.\u00a0 If this is the case, contact the plan administrator.\u00a0 Remember also if you\u2019re using your divorced spouse\u2019s benefit package, you are entitled to COBRA (see qualifying events).<\/p>\n

            Extensions:<\/strong>\u00a0 Individuals may qualify for an extension of the continuation coverage if, during the first 60 days, you became disabled.<\/p>\n

             <\/p>\n

            How much does COBRA continuation coverage cost?<\/strong><\/p>\n

            Even if you qualify to receive continuation coverage under COBRA, it certainly is not for everyone.\u00a0 Individuals and beneficiaries are responsible for up to 102% of the total cost of COBRA<\/em> (the 2% factors in employer administrative fees).\u00a0 You heard right!\u00a0 Not only are you responsible for the premium you paid while an employee, but you are now picking up the employer\u2019s share.\u00a0 That means if you paid $200 a month for benefits and your employer covered the remaining $300, you now owe $500 a month.\u00a0 A common misconception is that the employer must provide health insurance to the employee upon termination.\u00a0 Nope.\u00a0 You pay the way and your benefit is being able to stay on a group plan even though you are no longer employed as a member of the group<\/em> coverage.<\/p>\n

            Tip:<\/strong>\u00a0 If you are healthy, it might not make sense to pay COBRA continuation premiums.\u00a0 Many states offer individual plans with catastrophic coverage and high deductibles that can give you very basic coverage, but save you a lot of money while you look for work.\u00a0 These plans will prevent you from losing everything you own to medical bills, but it still might cost you $1,000 if you break your wrist.<\/p>\n

            Wrap Up<\/strong><\/p>\n

            That\u2019s the basic rundown on the COBRA continuation coverage layout, and hopefully you picked up some good information and a couple of helpful tips along the way. While COBRA is not for everyone, it certainly is for some.\u00a0 If you have a preexisting condition, an individual health plan might cost you thousands of dollars a month, but COBRA can give you other options.\u00a0 There are a lot of great befits to COBRA coverage; just remember to think through your circumstances before making a decision.<\/p>\n","protected":false},"excerpt":{"rendered":"

            COBRA stands for Consolidated Omnibus Budget Reconciliation Act . This health benefit passed by Congress in 1986 provides continuation of health coverage that might otherwise be terminated in the event of a job loss (Department of Labor).<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-360","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/posts\/360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/comments?post=360"}],"version-history":[{"count":23,"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/posts\/360\/revisions"}],"predecessor-version":[{"id":695,"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/posts\/360\/revisions\/695"}],"wp:attachment":[{"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/media?parent=360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/categories?post=360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.online-health-insurance.com\/articles\/wp-json\/wp\/v2\/tags?post=360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}