Cobra Rights

The Consolidated Omnibus Budget Reconciliation Act of 1985, also known as COBRA, provides you with the opportunity of maintaining the health coverage you had with a previous employer for yourself and your family.

Under this act, if you voluntarily resign from your job or are fired for any reason other than gross misconduct, you have the right to continue with your former employer’s plan for individual or family health insurance for up to 18 months. This continuation of coverage would be at your own expense.

You, your spouse, and your dependent children are eligible for COBRA coverage. There must be a qualifying event, as outlined below, and you then you are eligible to purchase COBRA for up to the maximum coverage period allowed. You can always drop COBRA when a better health insurance
option becomes available. Your spouse or children can be covered by COBRA regardless of whether or not you are.

COBRA coverage periods

Qualifying Event Eligible Beneficiary Maximum coverage time
  • Job termination
  • Reduced hours
Employee
Spouse
Child
18 months
  • Employee entitled to Medicare
  • Divorce or legal separation
  • Death of employee
Spouse
Child
36 months
  • Loss of dependent-child feature
Child 36 months

Some federal employees, church-related organizations, and firms employing further than 20 people are exempt from the law. The District of Columbia is also exempt. But, many states have put in place their own laws that will extend the federal COBRA coverage, so working for a small business may not necessarily mean you’re out of luck.

The coverage you will have under COBRA must be the same as the coverage you had while employed. You cannot choose a less expensive plan. This may come as a shock to people when they realize how expensive the premiums actually are.

The Requirements for Beginning COBRA
Proper procedure must be followed to begin COBRA, or you could lose your right to the coverage.
Your employer must let the health plan administrator know of the death, job termination, or reduced hours of employment within 30 days. If there is a divorce, separation, or your child loses dependent status, you
must notify the health plan administrator within 60 days.

The plan administrator will then alert you and your family within 14 days about your right to elect COBRA. You must ensure that your health plan administrator has your correct mailing address to be able to notify you. You then have 60 days to decide whether to buy COBRA or not. This duration starts from the date your health plan administrator notifies you, or the date you lost your coverage, whichever is later. Your plan will then be effective retroactive to the date you lost the benefits.

Learn
More About COBRA
(U.S. Dept. of Labor)