Understanding COBRA Insurance: A Lifeline for Continued Coverage
Losing your job or experiencing a significant life changing event can be stressful, especially when it comes to health insurance. Fortunately, the Consolidated Omnibus Budget Reconciliation Act, aka COBRA, provides a way for individuals and families to maintain their employer-sponsored health insurance after they leave or lose their job. Let’s find out how COBRA can work for you!
What is COBRA Insurance?
COBRA is a federal law enacted in 1985 that allows eligible employees and their dependents to continue their group health coverage after experiencing a qualifying event. A qualifying event includes a job loss, reduction in work hours, divorce, or death. COBRA applies to employers with 20 or more employees and ensures that individuals don’t face sudden loss of health coverage during transitional periods. Employers are required to notify eligible individuals of their COBRA rights, and enrollees typically have 60 days from the notice date to elect coverage.
How Long Does COBRA Coverage Last?
COBRA coverage is temporary and typically lasts up to 18 months for most qualifying events. However, certain circumstances, such as disability, may extend coverage up to 29 months. Dependents may qualify for up to 36 months of coverage in some cases. This timeline allows you some reprieve as you look for other alternatives to your health care. That way, when life hits you hard, you won’t stay down!
COBRA vs. Other Health Insurance Options
Alternative health insurance options to COBRA are marketplace plans. Under the Affordable Care Act, individuals losing job-based coverage qualify for a Special Enrollment Period, allowing them to select a plan that could be more affordable through the Health Insurance Marketplace. Medicaid could also be an alternate option to COBRA depending on your income. Another possible alternative to COBRA could be your spouse’s employer-sponsored health insurance. If your spouse is able to sign you onto their plan, it may be more cost-effective.
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Is COBRA Right for You?
COBRA can be a lifeline for those needing uninterrupted healthcare. But don’t just default to what’s familiar—explore all your options to find the most cost-effective and comprehensive coverage. A little homework now can save you big later. Better yet, let an expert insurance agent handle the heavy lifting at no cost to you.
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We hope that this information on COBRA was useful to you.
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This article was updated on 5/21/2025.