How to Understand Your Rights Under COBRA

COBRA is a federal law that enables you to purchase health insurance at a group rate from your employer after you leave your job - whether you quit or are fired.

Instructions

Difficulty: Moderately Easy

1. Understand that COBRA is a federal law that allows an employee and his or her dependents to continue medical insurance coverage for up to 18 months after leaving a job. The law covers those who quit a job as well as those who are fired.
2. Realize that an employer with 20 or more employees must provide written notice offering COBRA coverage within 14 days of an employee's departure.
3. Be aware that the full cost of the insurance, plus up to a 2 percent administrative fee, must be paid by the employee. Although the insurance may be expensive, remember that coverage is purchased at a group rate and that an individual policy purchased independently would be much more expensive.
4. Know that COBRA coverage is available for up to 18 months after you leave a job. Many workers use COBRA during the waiting period before health insurance benefits begin at a new job.

Tips & Warnings

• COBRA coverage is also available to family members after a divorce or when an employee dies. Different time periods apply in these situations.