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COBRA Insurance Alternative

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, was passed by Congress in 1986 to, among other things, extend health insurance coverage for those who may otherwise lose it in certain circumstances.

  1. Coverage

    • COBRA is considered an alternative to normal group coverage received through employers. People whose hours are cut at work--and therefore become ineligible for their normal group insurance plans--may qualify for COBRA. Those terminated from their employment for reasons other than gross misconduct may also qualify. The primary insurance holder's children, spouse and former spouse(s) may also qualify for the coverage, depending on circumstances.

    Cost

    • COBRA insurance rates are much higher than the employer-backed insurance plan but sometimes lower than private insurance costs. The precise amount of those costs will vary from situation to situation.

    Duration

    • Though COBRA may be extended beyond the required time, it generally provides coverage for a maximum of 18 months. Continuations can be sought, however, for special circumstances and coverage may be offered for 36 months.

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