David Kirkpatrick

September 30, 2009

What is COBRA?

With all the talk about health insurance and ongoing unemployment, COBRA gets tossed around a lot in news and conversation. Here’s a quick overview of COBRA from WeCompareInsurance.

From the first link:

previous article covered how the recent government stimulus plan, known as the American Recovery and Reinvestment Act of 2009 (ARRA), affects COBRA, but the more simple question is, “What is COBRA?”

COBRA stands for Consolidated Omnibus Budget Reconciliation Act and was passed by Congress in 1986 to provide health benefit provisions that provide continuation of group health coverage that would end, such as employer-provided health insurance for an employee who loses his or her job. COBRA amended the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act. If you qualify for COBRA you can keep your group health insurance for a period of time, but you do have to continue paying for your policy.

The following is taken directly from the Department of Labor’s website on COBRA on exactly what COBRA does:

What does COBRA do?

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

You must meet a number of criteria to qualify for COBRA coverage, but if you do qualify make certain to complete your application and other paperwork within required deadlines. These deadlines do change – as in the ARRA event in 2009 – so it’s in your best interest to do some research and find out the current deadlines and requirements for COBRA. Currently typical COBRA lasts up to 18 months after the qualifying event, e.g., losing your job, and a qualifying disability can extend that coverage up to another 11 months.

Head to the Department of Labor’s COBRA FAQ page for employees for more information on its continuation of health insurance benefits.