Learn how COBRA insurance works, who qualifies, how long coverage lasts, and how to enroll after losing employer-sponsored health insurance.
If you lose your job or experience a major life change, you may still be able to keep your employer-sponsored health insurance through COBRA.
COBRA, short for the Consolidated Omnibus Budget Reconciliation Act, allows eligible workers and their families to continue their group health coverage for a limited period after certain qualifying events.
Here’s what you need to know.
How COBRA Insurance Works
COBRA applies to most private-sector employers with 20 or more employees. When certain life events occur, employers must allow employees and their families to temporarily continue their health insurance coverage under the same group plan.
However, you will typically pay the full premium yourself — sometimes plus a small administrative fee.
What Are Qualifying Life Events?
COBRA coverage may be available if you experience:
- Termination of employment (voluntary or involuntary)
- Reduction in work hours
- Divorce or legal separation
- Death of the covered employee
- Medicare eligibility of the covered employee
- Loss of dependent child status under the plan
These events trigger eligibility for continued coverage.
Who Is Eligible for COBRA?
Qualified beneficiaries include:
- The employee
- A spouse
- A former spouse
- Dependent children
To qualify for COBRA, you must meet three requirements:
- Your employer’s group health plan must be covered by COBRA.
- A qualifying life event must have occurred.
- You must be a qualified beneficiary for that event.
How Long Does COBRA Coverage Last?
The length of COBRA coverage depends on the qualifying event:
- 18 months — If you lost coverage due to job termination or reduced hours
- Up to 36 months — For events like divorce, death of the covered employee, or dependent status changes
In some limited cases, extensions may be available.
How to Enroll in COBRA Coverage
When a qualifying event occurs:
- You or your employer must notify the health plan administrator.
- The plan will send you a COBRA election notice.
- You have 60 days to decide whether to elect coverage.
If you choose COBRA, your coverage will continue under the same group plan, but you may be responsible for the full premium.
Important Questions to Ask Your Plan Administrator
If you’re considering COBRA, contact your employer’s health insurance plan administrator to ask:
- Are you currently eligible for COBRA?
- When will coverage begin?
- How long will it last?
- What will your monthly premium cost?
You can also find detailed information about COBRA benefits through the U.S. Department of Labor at DOL.gov.
Key Considerations Before Choosing COBRA
COBRA can help you avoid a gap in health coverage, but it may be more expensive than other options, such as:
- ACA Marketplace plans
- Medicaid (if eligible)
- A spouse’s employer plan
It’s important to compare your options before making a decision.
Final Takeaway
COBRA insurance provides a temporary safety net for workers and families who lose employer-sponsored health coverage due to major life changes. While it allows you to keep your existing plan, costs can be higher since you may pay the full premium.
Understanding your eligibility, deadlines, and coverage length can help you make an informed decision during a transition period.