If you’ve just lost your job and were previously covered under employer-sponsored health insurance, you still have the legal right to stay on that insurance. Through a program called the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), you and any family members or dependents can still retain the same healthcare coverage.
Whether your previous plan only encompassed doctor visits, surgeries, and prescriptions, or your plan extended into dental and vision care or other medical benefits, the loss of your job does not mean the loss of your health coverage, too.
Whether you qualify for COBRA
There a variety of circumstances that may cause you to lose your job and your employer-sponsored health benefits, but there are certain qualifications to take advantage of COBRA.
Did you have a “qualifying” event?
- To qualify for COBRA, you must have lost your job, either voluntarily or through circumstances out of your hands. Qualifying events include layoffs, hours cutbacks, business closings or bankruptcy, and even leaving your previous job on your own. You won’t qualify, however, if you were terminated from your job over what the federal government deems as “gross misconduct,” such as criminal or dangerous behavior.
You must have been part of a group health care plan.
- To qualify for COBRA, you must have been enrolled in an employer-sponsored health care plan with at least 20 workers. You can also qualify if you were covered under a state or local government-sponsored plan.
- You are not eligible for COBRA if your healthcare plan was sponsored by the federal government or through a church.
- If your coverage was part of a group with less than 20 workers, you may still be eligible for “mini-COBRA” coverage provided by many states. To see if your state has a mini-COBRA plan, contact your state’s Department of Insurance.
- A full list of contacts for each state office can be seen here.
Your family is also covered under COBRA.
- If your spouse, former spouse, or any dependent children were part of your employer-sponsored healthcare plan, they can still be covered under COBRA. Your family and dependents can also qualify for COBRA on their own if you lose your employer-sponsored coverage after you become eligible for Medicare, you divorce or legally separate from your spouse, your dependent loses their coverage, or upon your death.
How much extra your health insurance will cost per month
If you were previously enrolled in employer-sponsored healthcare, you likely paid only a portion of your monthly premium and your employer chipped in to pay the rest. The rates vary, but in 2018, employers paid an average of 82% of their workers’ single-person healthcare premiums and 71% of family plan premiums, according to a leading national health foundation.
If you enroll in COBRA, you will be able to keep your previous coverage, but you will also be responsible for paying the full monthly premium amount, plus a 2% administrative charge.
When you have to enroll after losing your job
Your previous employer must notify you of the COBRA coverage option within 14 days of your job’s end. After that, you will have 60 days to decide whether to enroll in COBRA.
How long COBRA coverage lasts
If you choose to enroll in COBRA, you can get coverage under your previous job’s healthcare plan for 18 months. This period can be extended up to 29 months, if you suffer from certain disabilities.
What your alternatives are
If you lost your job, along with your employer-sponsored healthcare plan, you don’t have to enroll in COBRA. Even if you get the COBRA notification from your former employer, you are not required to take the option.
Other options instead of COBRA include:
- Enrolling in a plan at your new job
- Enrolling on your spouse’s healthcare plan
- Enrolling in a private plan through the Healthcare.gov marketplace
- Enrolling in Medicaid
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