May 8, 2009, Newsletter Issue #178: About COBRA

Tip of the Week

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal regulation that requires companies with 20 or more employees to allow employees who have left their job voluntarily, laid off, or fired for reasons other than gross misconduct, to continue their health insurance benefits even after they no longer work for the company. Individuals eligible to continue their insurance under COBRA include the employee, the employee's spouse, and the employee's dependent children, including those born or adopted during the period of COBRA coverage.

There are a handful of "qualifying events" that qualify you to continue your insurance under COBRA, each of which are slightly different for the employee, the spouse, and the dependents. Coverage under the COBRA rules is usually good for eighteen months, but under special circumstances, can continue for thirty-six months. You will be responsible for paying all premiums yourself with no contribution from the employer. Even though that will be expensive, premiums for group family health insurance coverage are almost always less expensive than a privately purchased policy.

If you or your spouse has recently become ineligible for employer-sponsored family health insurance coverage do not worry, getting family health insurance coverage is not impossible. It is very likely that you qualify for COBRA. The employer has thirty days to notify you of your COBRA rights, including the deadline by which you must notify the employer of your intent to continue coverage. For more information on COBRA, visit the United States Department of Labor Employee Benefits Security Administration's Web site.

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