Press Release

Am I Eligible For Cobra Insurance?

San Francisco United States
Categories: Non-Engineering / United States Tags:
cobra administration

COBRA insurance started with the Consolidated Omnibus Budget Reconciliation Act (COBRA). It's a unique form of temporary insurance that can help people who are in-between jobs or experience a sudden change in their work situation. Essentially, COBRA insurance allows eligible employees and their dependents to continue receiving the same health benefits they did as full-time employees even after losing their job or having hours reduced.

COBRA administration can be complex, but companies can rely on software to handle their requirements. But how does an employee know they're eligible for COBRA insurance?

What Does COBRA Cover?

The first thing to consider is whether or not a company's health benefits qualify for COBRA insurance. Typically, COBRA covers group health plans only when the employer has at least 20 employees. Furthermore, COBRA is only available if the employees have been part of the company for more than 50 percent of the business days of the previous year. That rule prevents recently hired employees from getting COBRA insurance if they're let go during the company grace period.

When Does COBRA Administration Begin?

The next factor in determining eligibility is to analyze the events surrounding the change in coverage.

The most common reason employees get COBRA insurance is because they are terminated. The former employee qualifies for coverage as long as the issue wasn't gross misconduct. However, COBRA goes beyond termination. It's also available if the employee's hours are dramatically reduced.

Other scenarios can apply, too. For example, coverage usually extends to dependents if the employee dies, qualifies for Medicare, etc.

How Long Does COBRA Insurance Last?

How long coverage lasts depends on the applicable scenario. In most cases, coverage can last anywhere between 18 and 36 months.

After the qualifying event occurs, employees have 60 days to determine if they want to accept COBRA insurance. At that point, the company will need to start handling administrative duties.

COBRA insurance is a valuable lifeline. It prevents a coverage gap and ensures that employees can still get healthcare even if they're in-between jobs.