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What COBRA is: COBRA is a federal law which allows eligible employees to keep their employer-sponsored health insurance coverage for a specific time period when they experience a qualifying event.  

As a general matter, COBRA lets you continue coverage for 18 months. If you stop work because you are "disabled" as confirmed by Social Security, you can continue coverage for an additional 11 months (which covers until the time when Medicare coverage automatically starts for people who are "disabled").  

Who COBRA applies to:

  • COBRA applies to employees and their dependents of an employer with 20 or more employees. 
  • If you work for an employer with less than 20 employees, you may have similar coverage under the law of the state in which you live. As a general matter, the discussion about COBRA fits both the federal and state laws. For information about your state, click here.

Premiums: Employers are not required to pay premiums for COBRA coverage (although some do voluntarily.)  Generally, the employee takes over payment of the entire premium -- not just the amount that was previously paid as an employee. Employers are allowed to charge an additional two percent (2%) of the premium for adminstrative overhead. Generally the amount of the premium is less than individual health insurance, even wtih the extra 2%..

Health Condition: The condition of your health doesn't matter when applying for COBRA because 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. 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.

Tied to An Employer's Plan: Because COBRA only continues an employer's plan, COBRA only continues so long as the employer's health plan continues in effect for active employees. If the plan is discontinued for active employees, COBRA stops for employees no longer working for the employer.

When considering whether to take COBRA or to look for other health insurance, think about the costs you would have to pay under each policy, whether a policy covers your health needs, and whether it permits you to see the doctors and get the treatments you want. It is advisable to compare the coverage you can obtain under COBRA and the cost to wht you can obtain in the marketplace because of the Affordable Care Act (Obamacare). Once you have enrolled in COBRA, you cannot switch to a marketplace plan until the next open enrollment period

How to apply for COBRA: 

  • The correct procedure for applying for COBRA depends on your particular cirumstance. To learn about the way the applies to you, click here
  • For information about applying for a COBRA extension because of "Disability" as defined by Social Security, click here

If  you have COBRA and it is about to terminate, start looking for health insurance. For example, one alternative is buying an individual policy. Thanks to the Affordable Care Act (commonly referred to as "Obamacare") you have the right to purchase individual health insurance at the same rates as a healthy person despite your health history.  

Keep in mind that the rules are strict both for getting coverage and keeping COBRA. The rules have to be followed or you lose your right.

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