One of the main requirements of COBRA is that under certain conditions, group health plans offered by employers with at least 20 workers (the year before leaving a job) you are entitled to a temporary plan extension. This “continuation coverage” is available to employees and their families for private sector plans as well as state and local government plans.
Keep in mind that you may be responsible for paying up to 102% of the plan cost. Even though your plan will cost more than when you were an active employee, it’s still cheaper than the common individual plan.
Eligibility for Continuation Coverage
You may be covered by COBRA if you and your family lose group health coverage as a result of several factors. Whether your employment ends by your choice or involuntarily, as long as the reason isn’t gross misconduct, you may be eligible for continuation coverage. Here are other ways you and your family may qualify as a former employee, or if your work schedule is cut:
- you have become eligible for Medicare
- employee death, divorce or legal separation
- your status as a dependent has ended
Your continuation coverage will be for a limited period of up to 18 months, depending mainly on why you lost your health coverage. In some cases, coverage may be extended for an additional 18 months. The Department of Health and Human Services administers COBRA provisions for state and local government health plans.