COBRA health insurance first came into existence in 1986, with the passage of the Consolidated Omnibus Budget Reconciliation Act (COBRA).
COBRA insurance offers individuals who have experienced certain qualifying life events a temporary extension of the group health coverage they had under their employer. However, employees are often required to pay out of pocket for the full cost of premiums.
For this reason, individuals who have recently become eligible for COBRA insurance should first consider enrolling in an ACA health plan. In addition to lower healthcare premiums, individuals who are newly eligible for COBRA may also be able to receive government subsidies to help cover part of the cost of purchasing affordable health insurance through the Affordable Care Act.
For more information on how ACA coverage stacks up against COBRA, click here.
What is COBRA Insurance?
While many people have heard of COBRA, few know exactly what COBRA insurance is. COBRA insurance is temporary health insurance coverage offered by the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986.
The key thing to remember is that COBRA health insurance coverage is temporary.
In addition, employers can require individuals who elect to continue coverage under COBRA to pay the full cost of health insurance premiums, along with a 2% administration fee. If your employer previously covered a portion of your premiums, this means you may now find yourself paying the full cost out-of-pocket, which is rarely affordable in cases of job loss.
Lose your job and need affordable health insurance? WNC Health Insurance may be able to find you a better plan for less than you would pay under COBRA! Learn more about better plans here
Qualifying for COBRA
“COBRA covers group health plans sponsored by an employer (private-sector or state/local government) that employed at least 20 employees on more than 50 percent of its typical business days in the previous calendar year.” ~ U.S. Department of Labor
If your employer’s group health plan is covered by COBRA, you may be eligible for extended health insurance coverage if you recently experienced any of the following qualifying life events:
- You were terminated by an employer providing your health coverage under a group plan (for reasons other than gross misconduct).
- You became ineligible for group health coverage due to a reduction in hours.
Family members (spouse and children) may also qualify for extended coverage under COBRA if they were insured under a family member who was an employee who was part of a group health plan, and that family member has:
- Passed away.
- Been terminated (for reasons other than gross misconduct).
- Become ineligible for group health coverage due to a reduction in hours.
- Become entitled to Medicare.
- Divorced or legally separated from the spouse.
Did you know? These same life events also qualify you for a Special Enrollment Period under the Affordable Care Act!
If you qualify for COBRA, you will be given the option to continue your employer-sponsored health insurance plan for a limited time.
“COBRA continuation coverage laws are administered by several agencies. The Departments of Labor and the Treasury have jurisdiction over private-sector group health plans. The Department of Health and Human Services administers the continuation coverage law as it affects public-sector health plans.” ~ U.S. Department of Labor
For more information on COBRA, visit the U.S. Department of Labor website at: https://www.dol.gov/general/topic/health-plans/cobra