It's a safety net for those who might lose their health insurance. Here are the rules regarding your eligibility, how long your rights last and how much it'll cost you.
If you've lost your job, don't panic yet about losing your health coverage, too. You could be eligible for the continuation of your benefits.
A federal law known as COBRA (short for the Consolidated Omnibus Budget Reconciliation Act of 1985) provides a vital bridge between health plans for qualified workers, their spouses and their dependent children when their health insurance otherwise might be cut off. Because of that security, COBRA has been hailed as a much-needed safety net for families in the midst of crisis, such as unemployment, divorce or death.
Under COBRA, if you voluntarily resign from a job or are terminated for any reason other than "gross misconduct" you are guaranteed the right to continue your former employer's group plan as individual or family health care coverage for up to 18 months, at your own
expense. In many cases, your spouse and dependent children also are eligible for COBRA coverage, sometimes for as long as three years. However, individual plans -- that is, plans you buy on your own, rather than through work or an association -- are not subject to COBRA law, and once you lose that coverage, you won't be able to get an extension under COBRA.
Are you eligible for COBRA?
In general, three groups of people, known as beneficiaries, are eligible for COBRA coverage: employees or former employees in private business, their spouses and their dependent children. One of several types of "qualifying events" must occur in order to trigger COBRA, as outlined in the chart below. You then are eligible to buy COBRA for the maximum coverage period as determined by your beneficiary status and the qualifying event. Remember: You don't have to stay on COBRA the whole time -- nor will you always be able to -- if different coverage comes along.
COBRA coverage periods