COBRA is Your Most Recent Health Plan Through an Employer
Commonly known as COBRA, it is a a federal law that allows employees and their dependents the right to keep the same group health insurance plan they had through an employer, if that plan were to end due to a qualifying event.
It's the exact plan with the same network, benefits, and coverage levels, because it is a continuation the existing group plan. The difference is that you must now pay the full premium, including the portion your employer previously covered, plus a small administrative fee.
Your copays for doctor visits will cost the same as they did while you were on the the employer plan.
Why Is COBRA So Expensive?
The monthly premium for COBRA is considered expensive because the individual is responsible for the entire cost of the premium, which was previously subsidized by the employer offering the group health plan.
Can You Choose A Different COBRA Plan?
Similar to an employee, the employer's annual Open Enrollment period is the only time you may change your existing plan to another one that is offered.
Can The Employer Change the Plan?
Legally, a company can change health plans once every 12 months, provided they inform you before the new plan’s effective date, ensuring compliance with COBRA laws. If your past employer changes their group health plan then you, along with the rest of the active employees will have to switch to the new group health insurance plan chosen by the employer.
What If The Employer Goes Out of Business?
Because COBRA is simply the continuation of the same coverage you had through a previous employer, if the employer goes out of business or drops their group health plan, then there is no group health plan for you to use. To remain medically covered, consider an alternative health plan.
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Frequently Asked Questions
No. COBRA lets you keep the same group health plan you had through an employer, but you pay the full premium plus a small administrative fee.
You can only change your plan during the employer’s annual Open Enrollment period, similar to active employees.
Yes. If your former employer changes their group health plan, you must switch to the new plan along with active employees.
COBRA coverage ends if the employer no longer offers a group health plan. To stay covered, you’ll need to find an alternative health plan.
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