Insurance: COBRA FAQ

Are you leaving a job that offers a health insurance plan? Whether you're leaving voluntarily or involuntarily, you may be worried about health coverage for you and your family. One law that may be able to provide you protection is called the Consolidated Omnibus Budget Reconciliation Act (COBRA). The US Department of Labor provides information about COBRA on its website. Here are answers to some frequently asked questions about health insurance and COBRA.


Q:

What exactly is COBRA?


  • A:

    It's a law passed by the US Congress to help individuals with their group health coverage if it's going to be terminated.


Q:

How does COBRA help individuals with their group health coverage?


  • A:

    COBRA allows former employees and certain others to continue the health coverage they received from work for a temporary period of time.


Q:

Do people pay the same amount under COBRA for health coverage?


  • A:

    Individuals normally have to pay more for health coverage since their employers are no longer helping to pay part of the premium.


Q:

Does every employer have to offer COBRA health coverage to its employees?


  • A:

    No, usually only employers with 20 or more employees.


Q:

Is every employee entitled to COBRA benefits?


  • A:

    No, COBRA sets specific criteria that must be met for an employee to receive benefits. The criteria covers three elements: health plan coverage, qualified beneficiaries and qualified events.


Q:

Is anyone other than the employee ever entitled to COBRA benefits?


  • A:

    In many cases, the employee's spouse and dependent child can be considered qualified beneficiaries and can receive benefits under COBRA.


Q:

What are some qualified events that'll allow someone to be covered under COBRA?


  • A: There are certain events that terminate health coverage that are considered "qualified" for COBRA coverage. These include:

    • Employment termination for reasons other than gross misconduct
    • Drop in hours of employment
    • Loss of coverage from divorce or legal separation
    • Death of the employee
    • Loss of status as a dependent child under the rules of the health plan


Q:

Is the health coverage under COBRA for former employees less than the health coverage for active employees?


  • A:

    The coverage must be identical. Any changes to the health plan apply to both former employees and active employees.


Q:

Can I be covered under COBRA for the rest of my life?


  • A:

    No, the coverage is only temporary. For most people, the coverage can last up to 18 months. Some qualified beneficiaries are entitled to coverage up to 36 months.


Q:

What federal agencies administer the COBRA coverage law?




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