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Frequently Asked Questions

Frequently Asked Questions

What is COBRA insurance?

COBRA is a law that was passed in 1986 to protect people from suddenly losing their health insurance plans if they lose their job. Under the law people, and their families, have the option to continue to use the health insurance plan they had while employed if they meet the conditions in the law - qualifying plan, qualifying beneficiary, and qualifying event. The plan remains exactly the same in terms of how it works and what it covers, however under COBRA you are responsible for paying the entire premium and in most cases COBRA coverage only lasts for 18 months.

How much does COBRA insurance cost?

The cost of COBRA insurance is set by the federal government and is 102% of the complete premium. The premium is made up of both what you paid while you were employed as well as what your employer paid while you were employed. You are responsible for paying the full premium and a 2% administration fee under COBRA. Learn more about how to calculate the cost of COBRA.

Who is eligible for COBRA insurance?

Surprisingly most people find they are eligible for COBRA. To be eligible the employee or covered family member must qualify under three requirements: qualifying plan, qualifying event, and qualifying beneficiary. Qualifying plan refers to the plan that the covered employee had. In most cases any plan that has at least 20 employees or more on the plan and is still active will qualify. Qualifying event refers to how the insurance was lost. In most cases if the covered employee lost, quit, or retired from their job, the employee and their family members will qualify. Finally covered beneficiary refers to who else is eligible and normally includes the spouse and any dependents.

Can I use COBRA if I am getting a divorce?

Divorce from a covered employee normally will qualify someone as a qualifying event. That means that if you are getting divorced, or even legally separated, from the covered employee you can qualify for COBRA for at least 18 months and in many cases 36 months.

How can I use COBRA if I am losing my dependent status?

If you are turning 26 years old and therefore losing your dependent status, you can qualify for COBRA insurance for between 18-36 months. Under COBRA you will maintain the exact same coverage, but you will have to pay 102% of the monthly premium.

What is gross misconduct?

Gross misconduct refers to any serious misconduct that was both intentional and willful. With COBRA any type of gross misconduct will disqualify you from COBRA coverage. This will also disqualify any beneficiaries.

Are there options that are more affordable than COBRA?

Yes. There are many options that are much more affordable than COBRA and can offer similar coverage. Many people save up to 65% when they choose a private plan instead of COBRA and it can offer similar coverage. High deductible and short-term plans can offer even more savings. Learn more about your health insurance options.

What options do I have if I don't qualify for COBRA?

There are three main options to consider if you determine you do not qualify for COBRA insurance. The first is state COBRA plans that are available to people who work at companies with between 2-19 employees. Second are private health insurance plans that can provide the same coverage as group health insurance plans. Finally you can consider governmental insurance plans that are available to people living at or near the federal poverty line.

What is a Mini COBRA insurance plan?

Mini COBRA insurance plans are COBRA coverage plans that wee created by state governments to extend COBRA benefits to people who work at companies with less than 20 employees on their plan. Normally these plans cost the same as COBRA but ensure that more people can enroll. Learn more about state COBRA plans.

Can I use COBRA if my spouse qualifies for Medicaid?

In most cases, yes. One of the qualifying events for spouses and children are when the covered employee becomes eligible for Medicaid. If the plan is qualifying, meaning it covered 20 or more employees, then the spouse and children can sign up for COBRA. The cost will be 102% of the premium and in most cases it can last as long as 36 months.

How long does COBRA health insurance last?

COBRA insurance lasts between 18 months and 36 months in most cases. The normal last for most employees and family members is 18 months. However in cases of divorce, loss of dependent status, or a second qualifying event COBRA will last 36 months.

Is there still a COBRA insurance subsidy from the federal government?

Unfortunately there is no longer a COBRA subsidy to cover the cost of COBRA. The subsidy was for 65% of the cost and at times extended the length of coverage. However that subsidy no longer exists.

When was the Consolidated Omnibus Budget Reconciliation Act passed?

The COBRA legislation was passed in 1986 by the federal government. It was created to protect employees and their families from suddenly losing their health insurance plans if they lost their jobs.

Why did the government create COBRA?

The government created COBRA insurance plans in order to make sure that families didn't suddenly go without health insurance if they lost their jobs or had their hours reduced. In addition the law extended to family members and beneficiaries going through divorce or who are losing dependent status.

What alternate plan is the closest to a group health insurance plan?

The closest plans to COBRA coverage are individual and private family plans. These plans are provided through private companies and can offer a much less expensive plan than COBRA. Normally private plans save people as much as 65% every month. Learn more about other health insurance options.

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