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COBRA Rights If Fired

Losing your job doesn't have to mean losing your health insurance. The Consolidated Omnibus Budget Reconciliation Act of 1986 -- COBRA -- may give you the right to stay on your employer's health plan after you leave, even if you were fired. Coverage won't last forever, but it may save you from joining the ranks of the uninsured before you find a new job.

  1. Qualifying

    • If your employer has 20 or more employees and offers a health plan, the plan is governed by COBRA. If you were a beneficiary of the plan on the day before a "qualifying event," you're entitled to keep your health insurance. Qualifying events include quitting your job, having your hours reduced or being fired, unless you're fired for "gross misconduct," as the U.S. Department of Labor puts it. Your spouse and children have added grounds for claiming COBRA coverage.

    Timeframe

    • If you're fired, and not for gross misconduct, your employer has 30 days to notify the health plan administrator. The administrator must notify you within 14 days of receiving the information, after which you have 60 days to decide if you want to maintain your coverage. If you accept, you have another 45 days to submit the first premium. The federal government has adjusted the coverage period from time to time; in 2011, for example, it was 18 months, plus 11 months if you're disabled.

    Payments

    • COBRA insurance isn't cheap. Your employer no longer pays part of your premium, so you'll have to pay all of it, which may add hundreds of dollars to the cost. Your premium can't be more than 102 percent of what an employee in the plan pays, however. You must keep up your payments to qualify for COBRA, but you are entitled to a grace period if you miss a payment or underpay. The government temporarily subsidized payments for unemployed workers, but that stopped in 2010.

    The Plan

    • You can only keep your COBRA insurance as long as your employer keeps offering a health plan. If your former employer stops offering health insurance benefits, your COBRA benefits will likewise disappear; this holds true whether the employer went out of business or simply decided to cut benefits. You're also bound by changes in the plan: If the copay or deductible amounts go up for employees, your copay and deductible will rise, too.

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