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Can My COBRA Insurance Plan Change in Coverage?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that was passed by Congress in 1986. The purpose of the law is to prevent insurance coverage from being immediately terminated when employment is terminated, giving insured persons an option to continue their health plan. COBRA is not an insurance plan itself, it is an extension of your existing coverage. Your health insurance coverage will not be changed.

  1. COBRA Is a Law

    • COBRA is often mistaken as a health insurance plan, but it is not. Instead, COBRA requires employers who meet certain criteria to participate, and it makes it possible for newly terminated employees to continue their existing health care for a limited time. COBRA continuation requires the insured person to pay the full premiums, including any portion that had previously been paid by the employer. COBRA is meant to give an insured person a chance to get other coverage without suddenly being left without medical care.

    Coverage Remains the Same

    • COBRA does not change your health care plan. It may appear that your insurance premiums have increased while using COBRA continuation, but only because you have to pay the portion that was previously paid by your employer in addition to the premiums you were paying before COBRA went into effect. By law, your insurance premiums can increase under COBRA, but only if the increase is being applied to all members of the health plan. In other words, you cannot be penalized or charged extra for COBRA, but you must pay any normal increases made to your existing health coverage.

    When COBRA Is Used

    • If an employer with more than 20 employees chooses to offer health insurance options to his employees, he must also participate in COBRA. If an insured employee is terminated, resigns or is laid off, he will receive a notice of COBRA eligibility within 30 days of the job ending. At that time, the employee has the option of signing up for COBRA insurance continuation or allowing the health insurance to expire.

    COBRA is Temporary

    • COBRA is not meant to replace health insurance. Once you have chosen to take advantage of COBRA continuation of health coverage, you have 18 months to find other coverage. If you have not been able to find replacement insurance after that time, you can apply for a single extension of COBRA coverage for up to an additional 18 months. If you are denied the COBRA extension or if you receive it and still haven't found replacement coverage when the extension ends, your health care plan will be canceled.

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