What is COBRA Health Insurance?
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows individuals to continue their employer-sponsored health insurance coverage after a qualifying event. This can be particularly important for those who experience sudden changes in their employment situation.
Qualifying Events
Employees may be eligible for COBRA coverage after specific events such as:
- Termination of employment (voluntary or involuntary)
- Reduction in hours that results in loss of health coverage
- Divorce or legal separation
- Death of the employee
- Dependent child status changes
Duration of Coverage
COBRA coverage typically lasts for up to 18 months, but can extend to 36 months for certain qualifying events. It is crucial for individuals to be aware of the specific time frame applicable to their situation.
Cost of COBRA
While COBRA provides necessary coverage, it can be costly. Enrollees are usually required to pay the full premium amount plus a 2% administration fee. This means that individuals need to budget accordingly to maintain their health coverage during this period.
Enrollment Process
Eligible individuals must receive a COBRA election notice from their employer within 14 days after the qualifying event. It is essential to respond within the specified timeframe to avoid losing coverage eligibility.