Facts About COBRA

COBRA extends health benefits.

Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1996, according to the U.S. Department of Labor. If eligibility requirements are met, COBRA provides you with a continuation of group health plan benefits after you leave a job.

Function

The U.S. Department of Health and Human Services (HHS) notes that COBRA provides terminated employees with the opportunity to continue their employer-sponsored group health plan for up to 18 months after leaving a job. Generally, you are responsible for paying the entire premium.

Eligibility

Employers must abide by COBRA if they have more than 20 employees. As an employee, you are eligible regardless of whose choice termination was, as long as gross misconduct on your part was not involved, according to the Department of Labor.

Beneficiaries

Beneficiaries, such as your spouse and dependent children, are eligible for COBRA as well as long as they were covered under your plan while you were employed, advises the Department of Labor.

Cost

While COBRA is typically expensive because your employer does not have to share in the costs, federal legislation provides a 65 percent subsidy to help cover premiums if you were involuntarily terminated between September 2008 and February 2010, notes HHS.

Considerations

The Department of Labor points out that your employer must notify you of your rights under COBRA within 14 days of termination. You have 60 days to accept or refuse coverage.

References

• U.S. Department of Health and Human Services (HHS): COBRA Continuation of Coverage Overview
• U.S. Department of Labor: FAQs For Employees About COBRA Continuation Health Coverage