Can I Get COBRA Insurance If I Quit My Job?

COBRA continuation insurance is a plan put in place by Congress that allows employees in certain situations to continue to be eligible for group health insurance coverage after they no longer work for the employer. The purpose of COBRA is to allow former employees time to seek out new employment without losing their health insurance. Employers are required to maintain the former employee in the health plan for a set amount of time. The employee must pay for the coverage.

Eligible Employees

• COBRA continuation insurance is available for employees in companies with 20 or more full-time-equivalent employees. To be eligible, you must have been covered by the company's group health insurance plan on the day before you quit or another qualifying event occurs. Certain nonemployees may also be covered, including contractors or directors who were on the company's health insurance plan.

Qualifying Events

• Other than quitting, there are several other events that can occur to trigger eligibility for COBRA continuation insurance. Any termination, whether initiated by you or the employer, other than for gross negligence, will result in COBRA eligibility. This means that if you are fired, laid off or become disabled and cannot work, you will be covered. You will also be eligible if your hours at work are reduced to the point where you normally would no longer qualify for the company's insurance plan. For example, if health insurance is only offered to full-time employees and your hours are cut in half, you can still receive COBRA benefits.

Is My Family Covered Too?

• If your spouse, children or other dependents were also covered under the company plan, they will be eligible for COBRA. Also, if an employee dies or files for divorce or legal separation, the spouse and dependents can apply for COBRA. This gives spouses some time to replace their health insurance coverage when they no longer can rely on their former spouses' plans.

What Happens if I was Fired for Stealing?

• If you were terminated for gross negligence, including theft, embezzlement, sexual harassment or endangerment, you are not eligible to apply for COBRA benefits. If you feel that you have been wrongly terminated and have not had charges filed against you or a judgment levied, you may discuss eligibility with your state's labor board or the U.S. Department of Labor, which administers the COBRA program.