Employee Rights Under COBRA

A job loss can be stressful. It is not always easy to understand the world of employee benefits after a layoff. Congress enacted the COBRA law to let newly unemployed people and their family members keep their health insurance while they transition to new employment. 

This article addresses many frequently asked questions about COBRA. If you recently lost a job and have questions about your rights under COBRA, you should contact a local employment attorney.

What Is COBRA? 

COBRA is an acronym for Consolidated Omnibus Budget Reconciliation Act. COBRA is a federal law that gives active employees the right to maintain their company’s group health plan coverage following the end of a job. This also applies if you lose group health coverage from some other event, like the death of a spouse, a reduction in your hours of employment, or going from full-time to part-time.

COBRA is not a permanent health care coverage solution. It is only available to you for a limited time after the qualifying event. However, it is a way to keep plan coverage after losing your job. Think of it as a safety net to help you out during certain life transitions. 

Who Is Eligible for COBRA? 

Not every ex-employee is a covered employee under COBRA. It applies to employers with at least 20 employees. The health insurance COBRA provides covers employees, spouses, qualified beneficiaries, and dependent children. The life events that trigger COBRA continuation coverage include:

• A layoff
• Having your hours cut
• Death
• Divorce or legal separation
• Reaching the age where you are no longer considered a dependent for your parents’ health insurance coverage

How Much Does COBRA Cost? 

With COBRA, you have to pay the entire monthly premium — the portion your employer used to pay — yourself. It can get expensive. You will also have to pay the portion of the insurance you paid while employed along with possible administrative fees. While the cost of coverage is expensive, it can be worth it to preserve your health care coverage.

Deciding whether to enroll will depend on your circumstances, including your health care needs, income, and other options you might have for health insurance. It may be less expensive to use the federal government’s health insurance marketplace created under the Affordable Care Act (ACA). You might also qualify for Medicaid or Medicare coverage.

How Long Does COBRA Coverage Last? 

COBRA is not a long-term health insurance solution. You should think of COBRA as a temporary solution while you identify and secure new health care options. Typically, people who enroll in COBRA can keep insurance for a maximum period of 18 months following the COBRA qualifying event. However, there are some exceptions. If you have a disability, you may be eligible for a disability extension to keep your COBRA health benefits for 36 months. 

How Do I Enroll in COBRA? 

Your former employer must provide notice on how to apply for COBRA. Your employer’s COBRA administrator must send you an election notice. The notice must let you know the election period, but you will have 60 days from the date of the qualifying event to decide if you want to enroll in COBRA. Enrolling in COBRA usually requires you to fill out some paperwork and follow the instructions of your health care plan administrator. Remember, you have to enroll in COBRA within 60 days of receiving the COBRA notice or you will lose the option for coverage. 

What Are My Rights Under COBRA? 

COBRA gives you the right to have the same health insurance coverage you did while you were employed. This includes the same benefits, doctors, prescription drugs, options, and health care services. Your COBRA rights also include the right to adjust your coverage and coverage options during open enrollment periods, just like you did when you were employed. Specifics like deductibles and co-pays may change.

If you have questions about your legal options after you get fired or laid off, talk to an attorney about your employment law rights.

Can I Cancel My COBRA Coverage? 

Yes, you can cancel your COBRA coverage at any time without penalty. However, once you cancel your COBRA election, you will not be able to reenroll or elect COBRA continuation coverage. So think about your future needs before you cancel. 

What Happens if I Don’t Pay My Cobra Premiums?

If you do not pay your COBRA premiums on their due dates you will lose your health insurance coverage. There may be a grace period for late payment. If you skip a premium payment, you will lose your COBRA coverage and you will not get it back. 

If you have questions about COBRA or if you have recently lost a job and did not receive a notice of your rights under COBRA, contact an experienced employment law attorney.