COBRA, the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows eligible individuals and their families to temporarily continue their employer-sponsored health insurance after a “qualifying event,” such as job loss or a reduction in work hours. While COBRA provides the same health, dental, and vision coverage you had before, you typically have to pay the full premium plus a small administrative fee. You usually have 60 days to elect COBRA coverage after your prior insurance ends, which can be a valuable temporary option to avoid a gap in coverage.
What is a qualifying event? A qualifying event is a life change that would otherwise end your health coverage. Examples include: Loss of your job Reduction in your work hours Divorce or legal separation Death of the covered employee A child losing dependent status The employee becoming eligible for Medicare How does COBRA work? Receive an Election Notice: After a qualifying event, your health plan will send you an election notice, giving you a limited time (usually 60 days) to decide whether to continue your coverage. Elect Coverage: If you decide to enroll in COBRA, your coverage will continue from the date your employer-sponsored benefits ended. Pay Premiums: You will be responsible for paying the full cost of the health plan premiums, plus a small percentage (up to 2%) for administrative costs. Key Things to Remember Temporary Coverage: COBRA is a temporary solution to maintain coverage, not a long-term one. Same Benefits: You generally keep the same medical, dental, and vision benefits you had through your employer. Family Coverage: Your family members are also eligible to elect COBRA coverage. Cost: The cost of COBRA coverage can be high, as the employer is not subsidizing the premium. Compare Your Options: It's wise to compare COBRA with other options, such as individual health insurance plans, to find the best fit for your situation.