COBRA Coverage

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted to provide a health insurance that would remain in effect should you be terminated or otherwise lose your job.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

To be eligible for COBRA coverage, you must have been enrolled in your employer's health plan when you worked and the health plan must continue to be in effect for active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would, except for the COBRA continuation coverage, cause an individual to lose his or her health care coverage.

These qualifying events are; 1) Voluntary or involuntary termination of employment for reasons other than gross misconduct, and 2) Reduction in the number of hours of employment.

The spouse and/or dependent children of the effected employee may also be eligible for coverage. Please consult with one of our Insurance Specialists to determine your specific rights and coverages.

Note: If your qualifying event was involuntary termination of employment that occurred after September 1, 2008 through March 31, 2010, you may be eligible for an additional coverage under the American Recovery and Reinvestment Act of 2009 (ARRA). For more information please visit the COBRA Premium Reduction FAQs or contact us.