Explanation of COBRA Health Insurance

The Consolidated Omnibus Budget Reconciliation Act of 1986, or COBRA, is a federal program that allows employees and their families to temporarily continue receiving health insurance benefits through their employer after they have left their jobs.

Events

• Employees who have COBRA-qualifying health plans who leave a company for any reason other than gross misconduct, or have a change in status that causes them to lose health coverage, are eligible for coverage under COBRA. These events, known as "qualifying events," include firing, resignation or layoff.

Time Frame

• An employee has a minimum of 60 days to elect COBRA coverage from the date that she received an election notice from her employer. An employer must send out this notice no later than 14 days after a qualifying event.

Considerations

• COBRA continuation benefits last for a maximum of 18 months. However, an employee can apply for extended coverage. An employee can lose COBRA coverage if he fails to pay his monthly premiums, his employer terminates group health coverage or he becomes eligible for Medicaid coverage.