ADVERTISEMENT

How to get COBRA if you lose your job-based health insurance, step by step

Americans are losing their jobs and as a result, their health insurance at an unprecedented clip due to the coronavirus pandemic.

family home neighborhood
  • One option is signing up for COBRA , which allows you to keep your previous health coverage for up to 18 months by paying both the employee's and employer's portions, but retaining group rates.
  • COBRA can be expensive, but if it's your best option for immediate health insurance, it could be worth the cost.
  • Private employers with at least 20 workers and an active health plan must offer COBRA.
  • Read more personal finance coverage.
ADVERTISEMENT

As Americans shelter-in-place to protect themselves from a growing health crisis, millions of workers are losing their jobs, and along with them, their health insurance .

Over half of Americans get health coverage through an employer, according to the Commonwealth Fund . If you get laid off, quit your job, or otherwise lose your coverage during this crisis, you have a few options for obtaining health insurance, including COBRA.

Named for the Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA allows you to continue receiving the exact same health coverage you've been getting from your employer after leaving the company, as long as you're not covered by another plan elsewhere.

ADVERTISEMENT

But there's a catch: While you'll retain coverage at group insurance rates, you'll have to pay both the employer's and the employee's portion, plus an administrative fee, which can drive up the cost of coverage significantly above what you're accustomed to paying.

While there are likely cheaper alternatives like using the special enrollment period for job loss to buy coverage in the Health Insurance Marketplace it's worth considering COBRA.

Private sector and state or local government employers with 20 or more employees offer COBRA continuation coverage. Many states have laws similar to COBRA that cover companies with less than 20 employees. Full-time employees count as one person, while part-time employees count as one-half.

ADVERTISEMENT

If you have left your job or had your hours reduced for reasons other than "gross misconduct," you're eligible to keep your health coverage for up to 18 months as long as you continue making the premium payments.

Of course, there's a caveat: The employer's health plan must be active for current employees. If it's not whether the business shut down completely or it suspended the health coverage benefit you won't be able to elect COBRA.

Your former employer is required to notify the insurer in charge of the health plan of a qualifying event in this case, termination or a reduction in hours within 30 days.

After that, the plan administrator has 14 days to send you a notice in the mail with information about your coverage, where you should send your paperwork, and most importantly, how much it will cost. According to COBRA rules, the total premium cannot exceed 102% of the individual employee's portion of the premium.

ADVERTISEMENT

If you don't want to wait for a letter, contact the health plan administrator or the company's benefits manager for more information.

After receiving an election notice, you have 60 days to elect to receive health coverage. If your plan also covered your spouse or dependents while you worked at the company, they would be covered under COBRA as well.

To elect coverage, follow the instructions in the notice.

ADVERTISEMENT

If you elect COBRA coverage, you have 45 days to pay the first month's premium from the date you mailed in your election form. If you pay in full and on time, you'll be retroactively covered. If you miss the payment, you could lose your ability to receive COBRA coverage entirely.

Coverage can last up to 18 months from the initial qualifying event (the date you were laid off). If your monthly premiums aren't paid in full and on time, the employer stops offering a group health plan, you become entitled to Medicare, you become insured by another plan, or you engage in fraud or otherwise shady conduct, your coverage could be terminated.

See Also:

ADVERTISEMENT

FOLLOW BUSINESS INSIDER AFRICA

Unblock notifications in browser settings.
ADVERTISEMENT

Recommended articles

Sony’s creators convention redefines the creative landscape for content creators

Sony’s creators convention redefines the creative landscape for content creators

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

10 African countries with the lowest life expectancy according to the World Bank

10 African countries with the lowest life expectancy according to the World Bank

Kenyan women are more obese than their men - here’s why

Kenyan women are more obese than their men - here’s why

Africa’s richest man Dangote stands between Europe and $17 billion in revenue

Africa’s richest man Dangote stands between Europe and $17 billion in revenue

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

10 most dangerous African countries in 2024

10 most dangerous African countries in 2024

Russia’s nuclear influence expands further north of Africa

Russia’s nuclear influence expands further north of Africa

ADVERTISEMENT