When it comes to employer-sponsored group health plans, COBRA insurance acts as a safety net for American workers. If you have a qualifying event that causes you to lose coverage, COBRA makes sure that you can stay insured. Qualifying events include job loss, reduction in hours, and divorce from the covered employee, among others.
While you have the option of keeping your group health coverage, you take on the full cost. However, it cannot go over 102 percent of the total for someone with similar coverage who has not had a qualifying event.
If your employer subsidized (covered) part of the premium, your total cost includes that portion as well as your employee portion. This is one reason why COBRA insurance is sometimes considered a “last resort” for healthcare coverage.
As long as you were covered under a specific plan, you can keep that coverage. In other words, if you had health coverage, you can keep your health coverage. If you had dental, you can keep dental. The same applies to vision. It’s important to remember that you cannot sign up for coverage that you did not have before.
However, you can pick and choose which coverages to keep. For instance, you could keep only health. Or you could keep health and vision, or vision and dental, or any combination.
Also, if your dependents (i.e., spouse and children) were covered, you can keep their coverages too. You can even elect to keep your kids’ coverage (and/or your spouse’s), but not your own.
You do not have to elect COBRA. You are free to shop for other insurance, even on exchanges set up by the Affordable Care Act (ACA).
Your employer must give you a minimum of 60 days to choose whether or not to elect COBRA insurance. You can even decline coverage, then change your mind and revoke the waiver, as long as you make your acceptance decision within the election time frame. Coverage begins on the day you elect.
It’s also important to know that COBRA coverage lasts a maximum of 18 months. Under certain circumstances, some recipients can get an 18-month extension (for a total of 36 months).
Once you qualify for Medicare, you generally lose your employer-sponsored group health insurance. However, your spouse and children who are not eligible for Medicare can still continue their coverage under COBRA. Again, you take on the full price of their coverage (see number 1), but they won’t be left without insurance just because your status has changed.
Visit the US Department of Labor’s website for information on COBRA.