How Long Do I Have Between When I Quit My Job & When I Can Sign Up for COBRA?

If you work for a company that employees more than 20 people, that company is subject to federal COBRA laws. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, addresses issues regarding terminated employees and group health insurance, specifically those related to the continuation of coverage. Any employee or his dependents who were covered at the time his employment was terminated may elect to maintain the health plan.

COBRA Eligibility

• Working for a company with more than 20 employees and participating in the group health insurance plan entitles you to benefits under COBRA. Voluntarily quitting your job does not make you ineligible, nor does involuntary termination unless it was because of "gross misconduct." You may also be eligible to continue your health insurance benefits while still working if a reduction in the number of hours you work kicks you out of your employer's plan.

Election Period

• After your employment is officially terminated, you will receive a notice from the insurance company informing you of your right to continue coverage under COBRA guidelines. The notice explains you have a 60-day election period within which to make the decision about maintaining your coverage. You must inform your previous employer of your intention to remain on the group health insurance plan.

Premium Payments

• Under COBRA, your health insurance will be under your former employer's group plan and the cost of your coverage is added to the group bill received by the company each month. Since the company has no paycheck from which to deduct your premium payments, you must make suitable arrangements with your former employer to pay your portion of the bill. Once you indicate your desire to remain on the group plan, you have 45 days to begin paying your premiums. Additionally, COBRA law permits your former employer to charge a maximum of 102 percent to offset the increased administrative costs associated with keeping you on the plan.

Timeline

• When your employment is terminated, your employer must inform the insurance company of the change within 30 days of its occurrence. The insurance company must then notify you of your rights under COBRA law within 14 days after receiving notice of your status change. After you receive the information and paperwork regarding COBRA continuation, you have 60 days to think it over, investigate alternative options and make a final decision. Even further, you have another 45 days after re-establishing your new coverage within which to make your first premium payment.