Can I Claim COBRA When I Quit?

In most cases, if you quit your job, you have the right to remain covered by your former employer's health insurance for up to 18 months. The requirements for continuing your coverage are spelled out in the federal law called COBRA. If you are eligible for COBRA coverage, your employer is required by law to tell you so before you leave.

Eligibility

• You are entitled to claim COBRA coverage when you quit only if you were actually covered by your employer's health insurance while you were still working. Covered, according to the Department of Labor, means you were enrolled in the employer's plan the day before your employment ended. If you weren't covered the day before you quit, your employer doesn't have to offer you COBRA (although there's nothing in the law that prevents it from offering you coverage if it wants to). You're also entitled only to continue the coverage you already have. You can't decide to switch to a plan with more generous benefits, or one with a lower monthly premium. And if your spouse or children aren't already covered by the plan, you can't add them.

Premiums

• Be aware that if you continue your health-care coverage under COBRA after quitting your job, the amount you pay in premiums is likely to increase dramatically. Although the law may require your former employer to keep you on the company health plan, that employer doesn't have to pay anything for your coverage. Employers commonly pay 70 percent or more of their workers' health insurance premiums, according to BLR, a human resources consultancy. But when you go on COBRA, you have to pay the full premiums yourself, plus as much as 2 percent extra to cover the administrative costs of keeping you in the plan. If you can't afford the premiums, you can't continue your coverage.

Reasons for Termination

• All employees who leave their jobs, either voluntarily or involuntarily, are entitled to continue their current insurance coverage under COBRA. There's one exception, however: employees who leave because of "gross misconduct." The law doesn't make a distinction between employees who were fired for misconduct and those who were given a face-saving choice between resigning or being fired for misconduct. If you leave your job under such circumstances, your former employer might challenge your claim for COBRA coverage.

Gross Misconduct

• The law doesn't spell out what constitutes "gross misconduct," so that's open to interpretation. The legal-affairs website Nolo says the definition is still evolving as courts hear cases related to COBRA denials. In general, though, it covers employees engaged in illegal activity, those who create a danger to others, and those who deliberately and flagrantly break workplace rules. Poor performance generally doesn't qualify.