Understanding COBRA: Frequently Asked Questions

Learn more about what COBRA is, how you qualify for it, and other important information.

What is COBRA?

COBRA refers to the Consolidated Omnibus Budget Reconciliation Act. It is a federal law that allows terminated employees from a private employer plan to remain covered by their existing employer-sponsored healthcare plan. It also covers existing family members.

What qualifying events will allow me to apply for COBRA, and how long will it last?

There are qualifying events that will allow you to get coverage under COBRA. They include:

• Loss of employment or reduced work hours (18 months)

• Loss of dependent child status when they turn 26 (36 months)

• Death of the employer plan covered employee (36 months)

• Addition of family members through birth or adoption (36 months)

• Divorce or legal separation (36 months)

• Employer-covered employee enrolls in Medicare (36 months)

Is it possible that my COBRA coverage can end earlier than expected or coverage be expanded?

Yes, there are two times this can apply:

• When an employer discontinues offering insurance to all of its employees

• When an employer goes out of business

How do I apply for COBRA?

You must apply or choose COBRA within 60 days of your qualifying event. You will receive a notice from your employer or you need to contact them with the qualifying event during this time. If you wait until the 59th day, you may have to back pay the premiums for the two prior months. But any medical care you received during that period of time should be covered by the COBRA plan.

How much does COBRA cost?

Cost is the main barrier to COBRA. Unlike the cost-share with your employer, you will now be responsible for the full premium. You will also incur a 2% administrative fee (102% total premium cost). You can contact your employer's benefits administrator regarding cost.

Can you get help paying for COBRA premiums?

It may be possible to get assistance paying for COBRA premiums through the Medicaid Health Insurance Payment Program. This is dependent on you qualifying for Medicaid and having access to an employer plan such as COBRA.

Are all employers bound by COBRA laws?

No. COBRA federal law applies to private employers who have 20 or more employees. It also applies to state and local governments. Federal employees have similar protections under a different law.

Is COBRA considered creditable insurance?

COBRA isn't considered creditable coverage for Medicare major medical benefits. So, if you are enrolled in COBRA and not part B within 8 months of turning 65, you may face substantial financial penalties for the rest of your life, even if you have months or years left on your COBRA coverage.

What are some benefits of COBRA coverage?

If you're in the middle of treatment, with COBRA you will not have to find a new insurance plan. It has the same coverage as before. Your doctors, treatment facilities, and prescription drug coverage will remain the same. Also, if you've already met your out-of-pocket yearly deductible on the employer plan prior to COBRA coverage, it may be less expensive even with the higher premium cost than to enroll in a new insurance plan and have new deductibles.

Can I terminate COBRA any time during the year?

Yes, you can terminate COBRA coverage within the following criteria:

• You can terminate your COBRA coverage anytime during the year for any reason by submitting a completed COBRA Benefits Termination Form. Do not send in the premium or the month you no longer want coverage.

• Termination of coverage can only go back to the beginning of the 30-day payment grace period in which the COBRA Benefit Termination Form is postmarked or the earliest date allowed by your plan and/or insurance carrier.

• If your spouse's coverage is being terminated. Your spouse must sign the COBRA Coverage Termination Form.

• If you're requesting to terminate your spouse and/or dependent(spouse) coverage but not your coverage, you must provide only the terminating person's information on the COBRA Benefits Termination Form.

• If termination is due to a death, a death certificate must accompany the application.

If terminating all individuals on the COBRA plan and you have a bank account set up for the premium payments, make sure you cancel the recurring payments after the last requested coverage date and premium pull.

If I had a family plan with my employer and lost my insurance coverage, do I always have to enroll my family in COBRA or can they get insurance somewhere else?

You have the option of enrolling your family if they were also enrolled under your employer plan, or you can enroll them in a special enrollment through an exchange plan. You can do the same for yourself. Be aware that your cost may drop significantly for premiums if you are no longer working and that you may qualify for premium subsidies based on income.

Can I be involuntarily dropped from COBRA?

Yes, under the following circumstances:

• You do not make the required premium payments within the grace period.

• After the date of your COBRA coverage election, one or more covered individuals become covered under another group plan.

• After the date of your COBRA election, one or more covered individuals become enrolled in Medicare.

• The company providing the benefits ceases to provide any group plan to active employees.

• Your coverage was extended due to a disability and the disabled individual is deemed no longer disabled by the Social Security Administration.

• There is a proven case of insurance fraud. Or for any other reason for which a plan would terminate the coverage of an active employee.

How does early termination of COBRA benefits affect enrolling in other insurance?

If you choose to terminate your COBRA coverage without the benefit of a special enrollment opportunity at the time of termination, you’ll generally have to wait until the next enrollment period for the new group health plan or Marketplace.

Can you get a refund for paid COBRA premiums?

No. If you cancel COBRA coverage, you are not entitled to a refund for premiums already paid. Payments made to COBRA are not refundable.

If I do not choose COBRA within 60 days, can I still get coverage?

Generally, no.

Will I get a notification from my employer regarding a COBRA insurance opportunity?

Yes. By law, your former employer is required to give you notice within 44 days of the qualifying event. Failure to do so will subject the employer to a penalty of $110 per day at the discretion of the court as well as the cost of medical expenses incurred by the qualified beneficiary.