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.
You may qualify for COBRA coverage if your job or life situation has changed. Here are some of the ways you may qualify:
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.
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 is only a short-term solution, so it’s a good idea to explore other options. Besides the general time limit of 18 to 36 months, there are a couple of other reasons your COBRA coverage can end.
Looking for more information on COBRA? Review our frequently asked questions to learn more.
If you lost your coverage through your work, COBRA is one of the coverage options you may consider. There are additional options, such as short term health insurance or Affordable Care Act (ACA) plans that you may also consider. Learn more about coverage options to consider.
You may qualify for COBRA coverage if your job or life situation has changed. Here are some of the ways you may qualify:
Check with your employer to learn the details of your furlough. In general, here are some guidelines:
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.
If there is no longer a health plan, COBRA would not apply and you would need to look at other coverage options.
COBRA is a short-term health care insurance that’s usually available for up to 18 months after the termination date of your job . (In some situations, COBRA coverage may extend beyond 18 months.)
You can get COBRA coverage if you worked for a business that employs 20 people or more. There are exceptions to this, so please call your COBRA administrator to get more information.
With COBRA, you can continue the same health care coverage through the plan you had when you were employed. That may include medical, dental and vision plans. If you choose to sign up for COBRA health care coverage, you won’t be able to choose a new plan or change the coverage you had under that plan until the next open enrollment, if your employer offers an open enrollment to active participants. You will be asked to choose and pay for the same health care coverage you had with the plan you were under when you were employed. 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 or change certain benefits within your medical plan if it wasn’t part of your plan before COBRA.
Your COBRA administrator should tell you within 14 days about the COBRA 4 continuation coverage that’s available to you.
Under regular COBRA you’d have to pay the full premium for your health care coverage, plus an administrative fee. When you were employed, your employer generally paid for some of the cost of your health insurance premium, and now you will responsible for the full amount. That means you may pay more for COBRA coverage.
Depending on your needs and situation, there are a number of other heath insurance options, besides COBRA, that may offer the coverage you're looking for. You may qualify for no cost or low cost plans , Affordable Care Act (ACA) plans or short term plans for temporary coverage that can fill the gap until you find a longer term solution. These options may also cost less than COBRA continuation coverage, so it may be helpful to compare the cost and coverage options before you make a decision on your coverage.
COBRA timelines in place during the COVID-19 National Emergency
Under the Disaster Relief Notice issued in response to the COVID National Emergency, the timeframe changed. The timeframe for electing and paying for COBRA is the earlier of (a) 1 year from the date you're first eligible for relief or (b) 60 days after the announced end of the National Emergency (the end of the Outbreak Period), plus any remaining time under the plan. The extended timeframe for electing and paying for COBRA cannot exceed 1 year.
You must elect COBRA coverage and make the required premium payment as outlined in your Qualifying Event Notice communication from your employer for coverage to be activated and claims to be paid. It is important to understand that coverage will not be activated, and claims will not be processed, until the required premium is paid. If you do not make required premium payments timely, claims will not be paid until the premium payments are made.
The period of time for an employee to give notice of the qualified events of divorce, legal separation, loss of dependent child status, or disability determination has been extended until the earlier of: (a) 1 year from the day the qualifying event or, (b) 60 days after the announced end of the National Emergency. The extended timeframe to give notice of these events cannot exceed 1 year.
Yes, if you are 65 or older, there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. In general, if you don’t enroll in Medicare Part A or B when you are first eligible because you are still employed, after the Medicare initial enrollment period, you have an 8-month special enrollment period 5 t o sign up for Medicare Part A or B, beginning on one of the following dates (whichever comes earlier):
If you don’t enroll in Medicare and elect COBRA continuation coverage instead, you may have to pay a Part B late enrollment penalty and you may have a gap in coverage if you decide you want Part B later.
If you elect COBRA continuation coverage and later enroll in Medicare Part A or B before the COBRA continuation coverage ends, the Plan may terminate your continuation coverage. However, if Medicare Part A or B is effective on or before the date of the COBRA election, COBRA coverage may not be discontinued on account of Medicare entitlement, even if you enroll in the other part of Medicare after the date of the election of COBRA coverage.
If you become entitled to Medicare after you’ve signed up for COBRA, your COBRA benefits cease. (But if COBRA covers your spouse and/or dependent children, their coverage may be extended for up to 36 months because you qualified for Medicare.)
If you are enrolled in both COBRA continuation coverage and Medicare, Medicare will generally pay first (primary payer) and COBRA continuation coverage will pay second. Certain plans may pay as if secondary to Medicare, even if you are not enrolled in Medicare.
