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What is COBRA Insurance and How Does it Work?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. It provides employees in certain circumstances the right to pay premiums and retain the group health insurance that they would otherwise lose after they:

• Lessen their hours of work
• Lose their jobs
• Quit their jobs

Most persons can keep insurance for up to 18 months. Some individuals may be able to keep it longer.

How the Affordable Care Act (ACA) Affects COBRA

The Affordable Care Act (ACA is sometimes called Obamacare) offers affordable health insurance for individuals, as well as those with cancer and other severe conditions. It ensures that most insurance plans cover the health care that cancer patients and survivors might want.

The state insurance marketplaces provide health insurance options to persons who do not have access through their employers. It can also support those who leave their works and lose their employer’s group insurance. And for some individuals, purchasing insurance through their state’s marketplace may cost less than paying for COBRA coverage.

The Duration that COBRA Coverage Lasts?

The length of time you can keep the COBRA plan depends on your qualifying event. If your primary medical coverage ends because your job ends (other than for gross misconduct), or because your hours are reduced, you and your qualified dependents can keep coverage under the employer’s plan for up to 18 months by paying for the full cost of the plan.

Note that a few states necessitate employers to provide COBRA coverage for a longer time than federal laws do. Additionally, your state insurance commissioner’s office can tell you more regarding this.

A Qualifying Event and a Qualifying Event Notice Under COBRA

A qualifying event causes employees or their dependents to lose their group health plan but allows them to qualify for COBRA coverage. Before a group health plan must provide COBRA coverage, the group health plan administrator must be told about the qualifying event in a qualifying event notice. You can learn more concerning qualifying events on the US Department of Labor COBRA website.

What is an Election Notice from COBRA and What Do I Do When I Get One?

Within 14 days of getting the qualifying event notice, the employer or health plan administrator must give the individual who is about to lose health insurance written notice of his or her COBRA rights. This written notice is known as the election notice. It should contain all of the information you want to understand COBRA coverage so that you can make an informed decision concerning whether to continue plan. It should also give you the name of the individual who handles COBRA for the health plan (the COBRA administrator) and inform you how to get additional information.

The employee or qualified dependents have 60 days after they get the election notice to select health insurance coverage for themselves under COBRA. The employee or dependent must inform the COBRA administrator listed on their COBRA election notice in writing if they wish to retain their health insurance. The COBRA administrator is the individual who keeps up with COBRA benefits for the employer.

How Long Do I Need to Have a Job to Be Covered Under COBRA?

You are qualified for COBRA coverage if you were covered under the group health insurance coverage on the day before your qualifying event. This 1-day rule also applies to your partner and dependents who were covered under the insurance coverage.

Resources and References:

• State Insurance Marketplaces
• COBRA Insurance