Retirement and COBRA Continuation Coverage

  1. Knowledge Base
  2. Starting COBRA
  3. Qualifying Event: Retirement
Can my mom, who is 62 and planning to retire, use COBRA insurance until she qualifies for Medicare at 65?
Retirement is considered a qualifying event under COBRA. When an employee retires, the individual may be eligible for COBRA continuation coverage. COBRA is not a new policy; it allows the employee to keep the same group health insurance plan they had with their most recent employer. A qualified beneficiary can maintain this coverage for up to 18 months, which is the maximum period allowed for continuation after retirement.

Dependent COBRA Coverage After Retirement

If an employee retires, dependents may be eligible for COBRA continuation coverage. COBRA allows dependents to remain on the same group health insurance plan the employee had with their most recent employer. The length of coverage depends on the circumstances:

  • Dependents can remain on COBRA for up to 18 months after retirement.
  • If the retiree becomes entitled to Medicare at the time of retirement, dependents may be eligible to continue COBRA coverage for up to 36 months.

How Retirees Get COBRA Coverage

To enroll, the retiree must complete the COBRA election forms provided by the employer or the plan administrator within the required timeframe, usually 60 days from the date of notice. Premium payments must also be made in full and on time to maintain coverage.

Alternatives to COBRA for Retirees

Retirees who are not yet eligible for Medicare may consider other options instead of continuing group health coverage under COBRA. Alternatives include:

  • Spouse’s Employer Plan: If a spouse remains employed and has access to employer-sponsored coverage, the retiree may be added to that plan.
  • Medicaid: Individuals with low income and limited assets who meet state and federal eligibility requirements may qualify for Medicaid.
  • Marketplace Plans: Affordable Care Act (ACA) marketplace coverage is available without age restrictions, provides comprehensive benefits, and covers pre-existing conditions. More information on ACA Plans.
  • Short-Term Medical Plans: Temporary coverage options that may include telehealth services and prescription discounts. Compare temporary health plans.