Cobra Information for Employees

COBRA is available to former employees if their employer provides a health insurance plan and has 20 or more employees. Congress passed the Consolidated Omnibus Budget Reconciliation Act in 1985 to give employees who quit or lose their job continued access to group health insurance. COBRA allows employees to avoid coverage gaps that can prevent an insurance company from paying for medical costs due to preexisting conditions.

Premiums

• Typically, you must pay 102 percent of the premium cost to keep coverage through COBRA. Since employers pay at least 50 percent of an employee's premium while employed, this can mean a significant jump in what the employee pays for coverage. The American Recovery and Reinvestment Act of 2009 supplements the cost of premiums for up to 15 months if you involuntarily lost your job before May 31, 2010, according to the Department of Labor. If you qualify for aid, the government will pay 65 percent of your premium. The Unemployment Extension Act of 2010 did not extend subsidies or the qualifying date.

Qualifying for Coverage

• Participation in your employer's health plan is compulsory if you want to qualify for COBRA coverage. You, your spouse and your children qualify for coverage regardless of your reason for unemployment, unless your employer fired you for gross misconduct, such as theft. If your employer reduces your hours, preventing you from qualifying for the group plan, you can qualify for COBRA. Your spouse and dependent children qualify for COBRA coverage if you get a divorce or die while covered under the group plan. Your spouse and dependents can continue coverage if you become eligible for Medicare.

Length of Coverage

• Typically, COBRA is available for up to 18 months. Coverage can be available for disabled individuals and their families for 36 months. You can lose your COBRA coverage for certain reasons including not paying your premiums, getting coverage through another group plan, or if your former employer stops providing insurance coverage for employees. If you qualify for government aid with your premiums, you must pay the premium in full each month after 15 months to continue your coverage.

Other Coverage Options

• If you cannot afford COBRA or exhaust your benefits, your state may provide alternatives for heath care coverage. All states provide health insurance coverage for children, through either Medicaid or your state's Children's Health Insurance Program (CHIPs). States typically provide plans for high-risk individuals, but the premiums can be expensive, and you must contact your area's Department of Health and Human Resources to discover what alternatives are available.