What is COBRA Insurance?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that lets you temporarily continue your employer-sponsored health insurance after losing job-based coverage. Key facts:
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Duration: 18-36 months of continued coverage
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Cost: You pay 100% of premiums + 2% admin fee
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Coverage: Identical to your employer plan
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Eligibility: Applies to companies with 20+ employees
Who Qualifies for COBRA?
You may enroll if you lose coverage due to:
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Job loss (voluntary or involuntary)
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Reduction in work hours
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Divorce/legal separation from covered employee
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Death of covered employee
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Child losing dependent status (age 26)
COBRA Costs Explained
| Cost Factor | Details |
|---|---|
| Premium | Full cost your employer paid (average $600-$700/month individual) |
| Admin Fee | +2% of premium |
| Total Cost | Typically 3-4x more than your employee contribution |
Example: If your employer paid $500/month for your $50-employee-share plan, your COBRA cost would be ~$510/month.
How Long COBRA Lasts
| Qualifying Event | Standard Duration | Possible Extension |
|---|---|---|
| Job loss/reduced hours | 18 months | Up to 36 months for disabilities |
| Divorce/death/dependent loss | 36 months | None |
Pros and Cons of COBRA
✔ Keep same doctors/network
✔ No gap in coverage
✔ No medical underwriting
✔ Coverage identical to employer plan
✖ Very expensive (no employer contribution)
✖ Temporary solution only
✖ Must enroll within strict deadlines
COBRA Enrollment Process
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Receive Notice: Employer must send election packet within 44 days of qualifying event
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Decision Window: You have 60 days to elect coverage
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Make Payment: First premium due within 45 days of election
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Coverage Retroactive: Starts from date of original loss
Critical Deadline: If you miss your 60-day window, you permanently lose COBRA rights.
COBRA Alternatives to Consider
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ACA Marketplace Plans
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Often cheaper than COBRA
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May qualify for subsidies
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Special enrollment period when losing coverage
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Spouse’s Employer Plan
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Qualifying life event allows enrollment
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Short-Term Health Insurance
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Temporary coverage (1-12 months)
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Much cheaper but fewer benefits
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State Mini-COBRA Laws
For employers with <20 employees, some states offer similar continuation coverage:
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California (Cal-COBRA): Extends to 36 months
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New York: 36 month continuation
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Texas: 6 months of coverage
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Florida: No state continuation law
5 Smart COBRA Strategies
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Compare Costs First – Marketplace plans may be cheaper
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Use COBRA Bridge – Enroll just for critical months between jobs
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Time Elections – Your 60-day window lets you enroll only if needed
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Check for Subsidies – Some severance packages include COBRA payments
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Coordinate with HR – Ensure proper paperwork submission
Frequently Asked Questions
Q: Can I get COBRA if I quit my job?
A: Yes – voluntary or involuntary termination both qualify
Q: Does COBRA cover dental/vision?
A: Only if they were part of your employer plan
Q: What if my employer goes out of business?
A: COBRA ends – no company means no plan to continue
Q: Can I switch from COBRA to an ACA plan?
A: Yes – during Open Enrollment or if COBRA expires
Next Steps If You Need COBRA
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Review your election packet carefully
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Calculate total costs vs. other options
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Mark all deadlines in your calendar
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Contact your HR department with questions
Pro Tip: If money is tight, you can enroll in COBRA retroactively within your 60-day window – only pay if you need to use it.