COBRA (Consolidated Omnibus Budget Reconciliation Act)

Under this Federal law, group health plans sponsored by employers with 20 or more employees are required to offer continued coverage for you and your family for 18 months after you leave the job, sometimes longer.

In order to continue your coverage under COBRA, you must notify your employer that you intend to do so within 60 days of losing your employer’s health coverage. You also must pay the entire premium for the cost of the coverage.

So basically COBRA lets you keep the health insurance coverage you had at your old job – but you have to pay the full premium. This will be a lot more expensive, since many employers typically cover 75%.

Still, COBRA is a good safety net that will help you and your dependents keep coverage until either you find another job and get into a new group policy or until you are able to purchase an individual health insurance policy.

According to the Insurance Information Institute (III) COBRA Is Available to You If:

• You leave a company and become unemployed or self-employed for up to 18 months.
• You are a widow or widower or child of an employee who dies while working for the same company for three years or more.
• You are the divorced spouse or child of an employee who has left the company he or she was employed at for at least three years.
• You are the child of an employee who left a job and have not yet reached age 23.