Are you looking to enroll in COBRA but not sure where to start? As someone who has gone through the process, I understand how confusing it can be. In this ultimate guide, I’ll walk you through everything you need to know about COBRA, including how to qualify, how to enroll, and how to make the most of your coverage.
What is COBRA?
COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows eligible employees and their dependents to continue their employer-sponsored health insurance coverage for a limited time after a qualifying event.
A qualifying event can include:
- Losing your job
- Having your hours reduced so that you no longer qualify for benefits
- Getting divorced or legally separated from your spouse
- Experiencing the death of a covered employee
How do I qualify for COBRA?
To qualify for COBRA, you must have been enrolled in your employer’s group health plan on the day before the qualifying event occurred. Additionally, you must not have been terminated for gross misconduct.
Finally, you must be a qualified beneficiary, which means you are one of the following:
- An employee
- A spouse or dependent child of an employee
How do I enroll in COBRA?
Once you’ve determined your eligibility, you will receive a notice from your employer outlining your COBRA rights and the deadlines for enrolling. You will then have 60 days to decide whether to enroll.
If you decide to enroll, you will need to complete an enrollment form and pay the full premium for your coverage. This premium includes the portion that was previously paid by your employer, as well as an additional 2% administrative fee.
How long does COBRA coverage last?
The length of your COBRA coverage will depend on the type of qualifying event that you experienced. Here are the maximum coverage periods for each type of event:
|Maximum Coverage Period
|End of employment or reduction of hours
|Divorce or legal separation
|Death of a covered employee
What happens when my COBRA coverage ends?
When your COBRA coverage ends, you will need to find other health insurance coverage. If you are eligible for Medicare, you can enroll in that program. Alternatively, you can shop for individual health insurance coverage through the Affordable Care Act (ACA) marketplace or through a private insurer.
How much does COBRA cost?
The cost of COBRA coverage will depend on the amount that was previously paid by your employer and the administrative fee. It’s important to note that the premium you pay for COBRA coverage will likely be higher than what you were paying as an employee, because you will now be responsible for the entire premium.
To give you an idea of the cost, let’s say you were paying $200 per month for your health insurance as an employee, and your employer was paying an additional $400 per month. Under COBRA, you would be responsible for the entire $600 per month, plus the administrative fee.
Can I get help paying for my COBRA coverage?
Unfortunately, there is no financial assistance available for COBRA coverage. However, if you are experiencing financial hardship, you may be eligible for other forms of assistance, such as Medicaid or the ACA marketplace.
How can I make the most of my COBRA coverage?
Here are a few tips for making the most of your COBRA coverage:
- Review your plan benefits carefully to make sure you understand what is covered and what is not.
- Take advantage of preventive services, such as annual physicals and routine screenings, to stay on top of your health.
- Consider enrolling in a Flexible Spending Account (FSA) or Health Savings Account (HSA) if your plan offers one. These accounts allow you to save money tax-free to pay for eligible healthcare expenses.
- Stay on top of your premium payments to avoid a gap in coverage.
What if I want to change my coverage?
If you are currently enrolled in COBRA and want to change your coverage, you will need to wait for the next open enrollment period. This is typically in the fall, and allows you to make changes to your coverage for the upcoming year.
If you experience a qualifying event outside of the open enrollment period, such as getting married or having a child, you may be able to make changes to your coverage outside of the regular enrollment period.
Enrolling in COBRA can be a confusing and overwhelming process, but with the information provided in this guide, you should be able to navigate it with ease. Remember to carefully review your plan benefits, stay on top of your premium payments, and take advantage of preventive services to make the most of your coverage.
Here are some of the most common questions about COBRA:
- Can I keep my same doctors under COBRA? Yes, if your doctors are part of your plan’s network. If you need to switch to a new plan or provider, make sure to check your plan’s provider directory to ensure that your new provider is covered.
- Can I change my coverage level under COBRA? Generally no, you will be enrolled in the same coverage level that you had as an employee. However, if you experience a qualifying event outside of open enrollment, such as getting married or having a child, you may be able to make changes to your coverage.
- What happens if I miss a premium payment? If you miss a premium payment, your coverage will be terminated. Be sure to stay on top of your payments to avoid a gap in coverage.
- Can I enroll in COBRA if I work for a small business? Maybe. In general, COBRA applies to employers with 20 or more employees. However, some states have their own mini-COBRA laws that apply to smaller employers.
- Can I extend my COBRA coverage? No, your coverage will end at the end of the maximum coverage period for your qualifying event.
- What if I have other questions about my COBRA coverage? Contact your plan administrator or insurance company for assistance. They should be able to answer any questions you have about your coverage.