Why you can trust Insurance.com Show
Insurance.com is dedicated to informing, educating, and empowering you to make confident insurance decisions. Our content is carefully reviewed by insurance experts, and we rely on a data-driven approach to create unbiased, accurate insurance recommendations. Insurance.com maintains editorial integrity through strict independence from insurance companies. If you’re leaving your job and don’t have new health insurance lined up, COBRA allows you to keep your previous employer’s plan for up to 18 months. You’ll have to pay the entire premium, plus up to 2% for administrative fees. COBRA health insurance costs can come as a shock if you're accustomed to your employer paying the premium. So how do you get COBRA health insurance? Can you get COBRA if you quit? Read on to learn more about how COBRA works. KEY TAKEAWAYS
IN THIS ARTICLE
What is COBRA insurance?COBRA is the Consolidated Omnibus Reconciliation Act, created as a health insurance safety net. COBRA lets you extend your former employer's health plan. You benefit from the same coverage, though your former employer stops contributing money to pay for coverage. Before the Affordable Care Act (ACA), people with pre-existing conditions had difficulty getting health insurance on the private market. Although the ACA removed pre-existing condition clauses, COBRA is still an option for keeping health insurance during the transition. You can elect COBRA for you and your family when:
If you become eligible for COBRA your employer will notify the insurance company within 30 days of your last day. The health insurance company will send you information about how to sign up for COBRA and how much it will cost. You have 60 days to sign up. With COBRA, you can use your health insurance plan like you did when employed. However, you’ll pay all of the costs with no help from your former employer. You can keep COBRA for at least 18 months. In some cases, you can have a COBRA plan for up to 36 months, depending on the qualifying event. How does COBRA insurance work if I quit my job?COBRA coverage works the same way if you quit your job. Regardless of the reasons for leaving your job, you can elect COBRA within 60 days of your last day. Nothing about your coverage, eligibility, or the length of time you can keep COBRA changes if you quit vs. a layoff or being fired. How much does COBRA cost?COBRA requires you to pay 100% of the health insurance premium plus up to a 2% administrative fee. Your former employer will no longer pay any part of the cost. The cost of COBRA depends on the health insurance plan. According to the Kaiser Family Foundation, the average cost of an employer-sponsored family plan in 2021 was $22,221. The employer paid a portion of that cost when you were employed, but with COBRA you will pay the entire amount. COBRA is pricey, but there are some options for help. First, you can use Health Savings Account (HSA) funds to pay your COBRA premiums, if you have one. The U.S. Department of Labor offers a Health Coverage Tax Credit (HCTC) for people who lose their jobs because of the “negative effects of global trade.” The HCTC pays 72.5% of premiums if you’re eligible. Why are COBRA insurance premiums so high?COBRA insurance premiums are high because when you leave a job, you're no longer part of an employer-sponsored health plan, which means you have to pay the full cost of the coverage. Usually, employers pay a significant portion of an employee's healthcare premiums. Can I start or stop COBRA coverage at any time?You can start COBRA coverage at any time during the 60-day period, even if you waived coverage at first, but premiums will be retroactive. You can also cancel COBRA coverage at any time. COBRA coverage ends automatically when you:
COBRA coverage also ends if the employer:
If the employer changes health plans, you can switch to the new plan like everybody else, but you can't keep the old plan.If you have a family health plan, not all family members have to enroll in COBRA. What is mini-COBRA insurance?Mini-COBRA permits employees of companies with 20 or fewer employees to continue health insurance coverage. It allows you to pay group rates for a specified time period. Most states have mini-COBRA laws for people who were employed by small businesses. These state laws work like the federal COBRA law, but the length of eligibility may differ:
Not all states allow mini-COBRA plans, and others have limited eligibility. State laws vary significantly, so make sure you check with your state’s Department of Insurance for specifics about mini-COBRA laws. COBRA coverage alternativesAlternatives to COBRA include a catastrophic health plan, short-term health insurance, or an ACA-compliant health plan. Any of these may be more affordable.
If you decide on a COBRA alternative, make sure to check the provider networks and what's covered. Find out more about your options by using our Health Insurance Finder tool. Is COBRA insurance worth it?COBRA is expensive, but it could be worth it if you can’t find a better alternative. If you have a lot of medical needs and can’t be without coverage, COBRA is an easy way to continue with the same network and providers. You may also want a COBRA plan if you expect new coverage will begin soon, such as with a new employer, but there is an anticipated gap before your new coverage kicks in. Frequently asked questions about COBRA insuranceDoes COBRA have dental and vision insurance?Yes, COBRA includes your dental and vision insurance for the same time period of 18 months. If your dental and vision is separate from your medical insurance, you can choose to keep one or the other through COBRA. If the dental or vision is bundled with your medical insurance, it will continue that way. Can you change from COBRA to a Marketplace plan?Yes, you can change from COBRA to a Marketplace plan during the open enrollment period if:
Can I continue my COBRA coverage for a longer period?Yes, you can extend your COBRA continuation coverage under two circumstances under which you may be eligible for an extension. The first is when a qualified beneficiary becomes disabled and meets specific requirements. They are entitled to an 11-month extension on their maximum period of continuation coverage. The second is if you experience another life event that qualifies you for an extension, such as:
Is COBRA worth getting?COBRA can save you money on out-of-pocket costs. Employer-sponsored health plans may provide broader networks than non-group health plans if you travel out of state or have more than one home.
Is COBRA going to be free?The federal government will pay 100 percent of COBRA insurance premiums for eligible employees who lost their jobs and for their covered relatives through September, allowing them to stay on their company-sponsored health plan, under the American Rescue Plan Act (ARPA) that President Joe Biden signed into law on March ...
How does COBRA work in CT?COBRA permits you and your dependents to continue in your employer's group health plan after your job ends. If your employer has 20 or more employees, you may be eligible for COBRA continuation coverage when you retire, quit, are fired, or work reduced hours.
How long can you be on COBRA in NJ?sence, the employee and/or dependents are entitled to 18 months of COBRA coverage. Time on a leave of absence just before enrollment in COBRA, unless under the federal and/or State Family Leave Act, counts toward the 18-month period and will be subtracted from the 18 months.
|