The Real Truth About Health Insurance

What is COBRA?

In 1986, the United States Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act, also known as COBRA. This law is meant to give an employee the option to continue their group health insurance that might otherwise have been terminated. COBRA health insurance isn’t really health insurance by itself; it’s a law meant to provide the option of continuing health insurance coverage for qualifying former employees.

What Does COBRA Do?

COBRA provides certain qualifying former employees and their dependents the right to continue health care coverage previously provided by their former employer. Private sector companies who provide group health insurance plans and employ more than 20 people may be subject to COBRA health insurance continuance. Check with your human resources department to find out if your company is covered under this law. The employee is responsible for COBRA health insurance continuation premium payments. If the employer paid the premiums, either partially or entirely, the former employee is expected to take over the premium payments. Eligible former employees can get up to 18 months of extended health insurance coverage with COBRA – and in some cases can apply for more time.

How Can I Qualify for COBRA?

To become eligible for COBRA health insurance coverage continuation, you must be enrolled in a group health plan that your employer provided at the time of a qualifying event, such as voluntary or involuntary termination or a reduction of hours, which would cause you to lose your health coverage. The employer must provide you with this option within 30 days of the event. You then have 60 days to decide whether to accept or waive this option. However, if coverage is waived within the 60-day election period, you may be able to revoke the waiver and resume health insurance continuation through COBRA from the date of revocation.