A federal law called the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), provides for your right to continue your health insurance coverage after separation from employment. You will or should receive notice of your COBRA rights from your employer within 14 days of the benefit plan administrator’s receipt of your separation from employment.
Commonly Asked Questions
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.
COBRA provides that you may continue your employee health insurance coverage for up to 18 months by making an election to do so within 60 days of receiving your employer’s notice of COBRA rights. If you are disabled you may procure COBRA coverage for 24 months. If you elect continued coverage, you may only be charged the cost of the employer’s premium as well as a 2% administrative fee.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific events. COBRA continuation coverage is often more expensive than the amount that active employees are required to pay for group health coverage, since the employer usually pays part of the cost of employees' coverage and all of that cost can be charged to individuals receiving continuation coverage.
In order to be entitled to elect COBRA continuation coverage, your group health plan must be covered by COBRA; a qualifying event must occur; and you must be a qualified beneficiary for that event.
The following are qualifying events for covered employees that cause the covered employee to lose health care coverage: 1) Termination of the employee's employment for any reason other than gross misconduct; or 2) Reduction in the number of hours of employment.
Federal employees are covered by a law similar to COBRA. Those employees should contact the personnel office serving their agency for more information on temporary extensions of health benefits.
Within 90 days after your employer denied you COBRA benefits, your plan administrator must provide you with a notice explaining that your employer denied you and why. At this time you may appeal. Be sure to talk to an attorney.