Understanding COBRA Health Insurance Continuation

What is COBRA?

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law that provides eligible employees and their families the option to continue their employer group health insurance coverage temporarily after employment ends or other qualifying events occur. This continuation is typically available at the individual’s expense.

General Eligibility Criteria: To be eligible for COBRA, an employee must have been covered by the employer’s group health plan on the day before the qualifying event. Additionally, the employer must have had 20 or more employees who worked over 1,000 hours in the previous calendar year to be subject to COBRA regulations.If the employer has fewer than 20 employees, a state “mini-COBRA” law may apply, offering similar continuation coverage options for employees.

What Does COBRA Stand For?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, a law enacted in 1985 to protect employees’ health benefits. While COBRA is not a typical acronym, it is often referred to in shorthand form to represent the Consolidated Omnibus Budget Reconciliation Act. The term is used broadly to describe the continuation of health insurance coverage under this federal law.

What is COBRA Coverage?

COBRA coverage refers to the temporary continuation of the same group health benefits provided by an employer to employees and their families. It covers the same services and options as the original plan, including hospital care, physician care, surgery, and prescription drugs.

Is COBRA the Same Coverage?

Yes, COBRA provides the same employer health insurance coverage that was available to the individual before the qualifying event. The only difference is that the individual must now pay the full cost of the premiums. COBRA plans may cost $400 – $700 per month per individual.

Visit the COBRA Premium Calculator to estimate your monthly premiums.

What is a COBRA Plan?

A COBRA plan refers to the health insurance coverage that individuals continue under the COBRA law after a qualifying event. It is not a separate insurance plan but the same group health coverage the individual had while employed.

COBRA Insurance Requirements

To qualify for COBRA insurance, an individual must have been enrolled in the employer’s health plan when they were employed, and the plan must be covered by COBRA. Additionally, a qualifying event must occur, such as termination of employment (other than for gross misconduct) or a reduction in work hours.

Qualifying Life Events

• Voluntary or involuntary job termination, excluding cases of gross misconduct.
• Reduction in the number of hours worked, leading to the loss of health coverage.
• Significant personal life changes such as divorce or legal separation from the covered employee.
• Death of the covered employee, resulting in the loss of coverage for dependents.
• A dependent child no longer meeting the requirements to be covered under a parent’s plan.
• Transitioning into retirement and the implications for health coverage.

Learn more about Qualifying Events for Health Insurance Continuation

Verify Your COBRA Eligibility

To determine if you qualify for COBRA coverage, use our simple tool. Take the eligibility survey to see if you meet the requirements for continuing your employer’s health coverage.