NOTE: Thanks to the 2009 stimulus bill if you were involuntarily let go by an employer during the period beginning September 1, 2008 and ending May 31, 2010, the federal government will pay 65% of the premium for up to 15 months as long as you are not eligible for another group health plan or Medicare. You only pay the remaining 35%. The new law does not extend the maximum period of time during which you would receive COBRA. (To learn more, see the section: Paying For COBRA). If the COBRA subsidy ends, it is advisable to do everything you can to continue to pay the premiums until you obtain replacement health insurance. (To learn more, see the section in this document: If the COBRA subsidy ends)

COBRA requires that certain employers with 20 or more employees allow terminating employees and their dependents to stay on the employer's group health insurance for up to 18 months after termination of employment or reduction of hours of work. If the termination is due to "disability", the extension can be up to 29 months. COBRA extension can be up to 36 months for dependents.

For COBRA purposes, it does not matter whether the employee's work is involuntarily or voluntarily terminated.

If a covered spouse divorces, or a dependent child comes of age, they can also receive an extension of health coverage.

While a few employers pay the premium for this continuation of coverage, generally the employee takes over payment of the entire premium -- not just the amount that was previously paid as an employee. Generally the amount of the premium is less than individual health insurance.

There are no health questions and no physical exam to qualify for COBRA coverage. COBRA is merely a continuation of the group plan. If you are a member of the group, COBRA applies so long as you pay the premium.

However, if you stop work because of a health condition, and want to qualify for the extension beyond 18 months, you must prove you are "disabled" to Social Security and Social Security must agree, during the 18 months.

COBRA only continues so long as the employer's health plan continues in effect for active employees. If the plan is discontinued, COBRA stops.

When considering whether to take COBRA, think about more than the premiums you would have to pay.

If you do not qualify for COBRA, or COBRA runs out see: Obtaining Health Insurance and Uninsured.

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