Is Your Employer Required to Offer You COBRA Insurance When You Have Been Let Go?

The Consolidated Omnibus Budget Reconciliation Act of 1986, or COBRA, is a federal law that mandates continuation of group health insurance coverage when employment ends. Under certain circumstances, your employer is required to offer continuation of benefits if you have been let go, according to the U.S. Department of Labor.

Coverage Continuation

• Employers must offer continuation of group health insurance coverage to employees who leave their job or are terminated for any reason except gross misconduct. Employees who have their work hours reduced can also qualify.

20 Full-Time Employees

• Continuation of health care benefits must be offered by employers who have 20 or more full-time employees and a group health care plan.

Premium

• The terminated employee must pay the entire premium for COBRA insurance. The employer is no longer obligated to pay any of the premium.

Length of Coverage

• The extended coverage is normally for a term of 18 months. Coverage can be extended for another 11 months in the event of a disability which occurs within two months of the start of COBRA coverage.

Also Eligible

• Spouses, divorced or separated spouses, and dependent children of the terminated employee are also eligible for continuation of coverage.

Advantage

• COBRA insurance makes it possible for the terminated employee to maintain health insurance coverage until new insurance can be arranged with a new employer, through a self-pay individual insurance plan or through government assistance. Although it can be expensive, COBRA can be critical for someone who may have a preexisting condition that prevents him from obtaining replacement insurance coverage until 12 or more months have passed.