What is COBRA?

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows certain individuals to continue their employer-sponsored health insurance coverage after they leave their job or experience a qualifying event, such as a reduction in hours or a divorce. COBRA applies to employer group health plans that cover 20 or more employees.

Under COBRA, you have the right to choose to continue your group health coverage for a limited period of time, although you will be responsible for paying the full premium, including the portion that your employer used to pay. The length of time you are eligible for COBRA coverage depends on the qualifying event. For example, if you leave your job, you may be eligible for COBRA coverage for up to 18 months. If you experience a qualifying event because of a disability, you may be eligible for COBRA coverage for up to 29 months.

COBRA can be a good option if you need temporary health insurance coverage after leaving your job or experiencing a qualifying event. However, it can be more expensive than other types of health insurance, since you are responsible for paying the full premium. It’s important to compare the cost of COBRA coverage to other health insurance options before deciding which one is right for you.

When to Consider COBRA

COBRA may be a good option if you need temporary health insurance coverage after leaving your job or experiencing a qualifying event, such as a reduction in hours or a divorce. Here are a few reasons you might choose COBRA:

  1. Continuity of coverage: COBRA allows you to continue the same group health insurance coverage you had while you were employed, which can be beneficial if you are happy with your current plan and have established relationships with healthcare providers.
  2. Pre-existing conditions: Under COBRA, you cannot be denied coverage or charged more due to pre-existing conditions.
  3. Time to find a new plan: COBRA allows you to keep your current health insurance coverage while you look for a new job or a new health insurance plan. This can give you some peace of mind and help protect you from the high costs of medical care.
  4. Limited eligibility: COBRA is only available to certain individuals who were enrolled in an employer-sponsored group health plan and who experience a qualifying event. If you are eligible for COBRA, it may be your only option for temporary health insurance coverage.

It’s important to keep in mind that COBRA can be more expensive than other types of health insurance, since you are responsible for paying the full premium, including the portion that your employer used to pay. It’s a good idea to compare the cost of COBRA coverage to other health insurance options before deciding which one is right for you.

Are there any drawbacks to COBRA?

COBRA can be a good option if you need temporary health insurance coverage, but it also has some drawbacks that you should be aware of:

Cost

One of the main drawbacks of COBRA is that it can be more expensive than other types of health insurance. Under COBRA, you are responsible for paying the full premium, including the portion that your employer used to pay. This can be a significant financial burden, especially if you have recently lost your job or experienced a reduction in income.

Limited duration

COBRA coverage is only available for a limited period of time, depending on the qualifying event. For example, if you leave your job, you may be eligible for COBRA coverage for up to 18 months. If you experience a qualifying event because of a disability, you may be eligible for COBRA coverage for up to 29 months. After this time, you will need to find a new health insurance plan.

Limited eligibility

COBRA is only available to certain individuals who were enrolled in an employer-sponsored group health plan and who experience a qualifying event. If you are not eligible for COBRA, you will need to find another way to get health insurance coverage.

No subsidies

COBRA does not offer subsidies to help lower the cost of premiums, as are available through the Affordable Care Act (ACA) and other government programs. If you are unable to afford COBRA coverage, you may need to look for other options.

Complex enrollment process

Enrolling in COBRA can be a complex process, and you may need to provide documentation and complete paperwork to be eligible. It’s a good idea to carefully review the terms of COBRA coverage and follow the enrollment instructions closely to ensure that you are enrolled correctly.

Nobody should feel stuck with COBRA or alone to figure out their health insurance options.

With When, you have a partner to help you find health insurance while in between jobs.