American Rescue Plan Act of 2021’s COBRA Subsidy Ends September 31. What’s next?

Eligibility For COBRA Continuation Insurance

The Federal COBRA Act gives workers and their dependents the right to continue their employer-sponsored health insurance, if that coverage would end due to a qualifying event such as job loss or family circumstances.

What Makes Me Eligible For COBRA?

After a qualifying event, as long as you were enrolled in a group health plan by your former employer, you are eligible for COBRA benefits. This means if you were only insured for 1 day and are let go or quit your job you are entitled to keep the same health insurance after.

What Is A Qualifying Event?

Qualifying events are specific circumstances that would cause an individual to lose employer subsidized health coverage. The type of qualifying event will determine who the beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of continuation coverage.

Requirements For A Qualifying Event

The qualifying event requirement is satisfied if the event is (1) the death of a covered employee; (2) the termination (other than by reason of the employee’s gross misconduct), or a reduction of hours, of a covered employee’s employment; (3) the divorce or legal separation of a covered employee from the employee’s spouse; (4) a covered employee becoming entitled to Medicare benefits under Title XVIII of the Social Security Act; or (5) a dependent child ceasing to be a dependent child of the covered employee under the generally applicable requirements of the plan and a loss of coverage occurs.

Qualifying Events For Employees In The Workplace

These events apply to the covered individual who holds employer-sponsored health insurance. These events allow you stay covered for up to 18 months.

You Quit Your Job

You are covered under COBRA if you quit your job voluntarily. This protects workers and their qualified dependents with continuing health coverage after the covered beneficiary decides to stop working.

… including Retirement From Work

Retirement is viewed as “quitting your job”. You are eligible for up to 18 months on COBRA when you retire.

You Laid Off Or Fired From Your Job

Except in the case of gross misconduct, COBRA must be extended to employees that were involuntarily terminated.

Hours Reduced That Would Result In Loss Of Health Insurance

If a requirement of your employer-sponsored insurance is that you work a minimum number hours per week and your scheduled less time, the COBRA law requires the business to provide you an option to continue your same insurance.

Qualifying Events For Spouses and Dependent Children

These events apply when there is a relationship change between the insurance policy dependents and the covered employee. In these situations, you may have COBRA coverage for up to 36 months. 

You Lost Insurance Due To Legal Separation Or Divorce

While you are working and if your family changes due to divorce, annulment, termination of a domestic partnership, or legal separation the covered spouse or added dependents are able to elect COBRA insurance. Make sure to keep your plan administrator in the loop on the dates you need to stop coverage when family separates. Your employer should then provide your added spouse or domestic partner the same coverage they had while you were together.

Lost Insurance Due To Loss Of Dependent Status At Age 26

The Affordable Care Act requires that adult children are able to stay on their parent or guardian’s employer-sponsored insurance until they are 26 years of age. At that point, the dependent must find new health insurance. If the former dependent wishes to keep the same health coverage they had, COBRA allows them up to 36 months.

Death Of The Covered Employee

If the unfortunate happens the COBRA law provides that widows and qualified dependents are able to continue the same group workplace insurance they had previously.

How Long Can You Stay On COBRA?

18 or 36 Months
When a workplace event separates you from your job, you are allowed a limited time to stay on your health insurance with COBRA. Former employees can keep their work insurance up to 18 months. When the qualifying event is family  separation event, like death, divorce or separation, the former spouses and dependents are given the right to extend their insurance benefits for up to 36 months.

 

Qualifying COBRA Event ​Length of Continuation Coverage
​Reduction of Hours (resulting in loss of coverage) ​18 Months
​Voluntary Termination of Employment (quitting your job) ​18 Months
​Involuntary Termination of Employment (getting fired from job) ​18 Months
​Divorce, Annulment, Termination of Domestic Partnership, or Legal Separation ​36 Months
​Child ceases to be a Dependent (e.g. child turns 26) ​36 Months
​Death of Employee ​36 Months

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Disability Extension Of COBRA Benefits

If an individual has been determined to be disabled at the time of a qualifying event the law allows for an 11 month COBRA disability extension. Additionally, if you become disabled within the first 60 days of your post-work coverage, you may extend COBRA to 29 months.

Small Businesses Are Exempt From Federal COBRA

In general, COBRA is required of all employers with 20 or more employees. Depending on the state you live in, businesses with fewer than 20 workers may be required to offer the same workplace health insurance they had while employed. If you work for a small business you will want to check if your state has a mini-COBRA law to find out if you are eligible.

Is COBRA Right For Me? Get Expert Advice.

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The COBRA Insurance website helps workers with their insurance options while in-between employers. If you have questions about choosing COBRA, please call our HealthCare.gov Certified Insurance Specialists.
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