Frequently Asked Questions About COBRA Insurance

Learn the answers to the most commonly asked COBRA insurance questions

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COBRA Insurance can be a confusing topic and likely as you consider enrolling in COBRA health insurance and exploring other health insurance options, many questions will arise. Learn the answers to the most commonly asked questions about COBRA Insurance and it’s alternatives.

What is COBRA Insurance?

Although most people think that COBRA insurance is an actual insurance plan, it is actually a piece of legislation passed by the federal government in 1986, that allows an eligible employee to continue their previously provided employer health insurance plan after losing or quitting their job. That means that under the COBRA insurance laws, you can choose to continue to keep the exact same health insurance plan you had at your job as long as you pay the full premium and meet the requirements. Most people who work at companies with at least 20 full time employees (or their part time equivalents) and were not fired for gross misconduct (a serious offense) can keep their insurance, normally for 12-18 months. Essentially, it allows you to continue your health insurance plan, at full cost, while you seek out another job or alternate insurance. It is meant to protect individuals and families from suddenly being without coverage or experiencing a lapse in coverage that makes it more difficult to find health insurance in the future. COBRA insurance benefits extend to spouses, children, and any other covered dependents and you can add beneficiaries and change your plan options, just as you could while you were employed.

Who is eligible for COBRA insurance?

Under the federal COBRA insurance law, most people who worked at a company with at least 20 employees and were not fired for a serious offense can elect to continue their plan with COBRA. COBRA insurance is also available for employees who quit their jobs voluntarily. Anyone who was previously covered under your insurance plan is also eligible to continue coverage with COBRA insurance. In order to find out if you meet the federal requirements, the easiest way is to ask your employer. They are required by law to provide you with a COBRA insurance election form within 14 days of your insurance coverage ending. Additionally, if you do not qualify under the federal COBRA insurance laws, you may be covered under a state COBRA law. Many states extend COBRA benefits to people who work at companies with between 2-19 employees.

When should I consider a COBRA insurance alternative?

In our opinion, it is important for everyone to consider a COBRA insurance alternative since the cost of care can be significantly less. Under most circumstances, you can find an alternative plan that is more cost effective and provides the same level of care. However, for people with pre-existing health conditions or serious medical needs, COBRA insurance may be the best option. It also can be a quick and easy solution for short term health insurance if you can afford it and know you will have health insurance soon.

How much does COBRA insurance cost?

The cost of COBRA insurance varies and is based on the cost of your health insurance plan at your previous employer. You will be responsible for paying the entire premium, which means both your contribution and your employer’s contribution, as well as a 2% administration fee. For individuals this normally ranges between $300-$500 depending on the plan and for families ranges from $600-$1000. Most people do not realize how much their employer actually contributes to the cost of their insurance and find it is smart to seek out alternatives that may be more cost effective.

How do I get a quote for other health insurance plans?

The easiest way to find quotes for alternative health insurance plans is to use the simple form provided here. It will provide you with fast and free quotes for various insurance options. It is smart to compare 3-5 plans with your COBRA insurance plan. Pay attention to the type of plan, monthly cost, deductibles, coverage area, and coverage specifics to find the plan best suited to your needs.

Who is COBRA insurance best for?
  • Covered employees and beneficiaries that have pre-existing health conditions that either will not be covered with a new insurer or will be very expensive.
  • People who know they will soon be covered under a new employer's plan and need a very short term solution since many insurance plans have a minimum term length written into the contract.
  • People over the age of 50 who need regular doctor care or for whom alternative insurance plans will likely be more expensive than COBRA insurance
  • Covered employees and their beneficiaries who are pregnant or planning to become pregnant
  • Anyone who has recently been denied from another health insurance plan
  • Anyone who has been in an accident or experienced a medical emergency or other serious medical need in the last 60 days
  • Anyone on very expensive medication
  • Anyone with a history of health problems or any recent health problems
  • Anyone who does not want to change their coverage at all and can afford COBRA insurance premiums
  • Anyone who after researching COBRA insurance alternative quotes can not find a less expensive option that works for them
Will my spouse and dependents be covered with COBRA insurance?

If your spouse and dependents were covered while you were employed, they will remain covered if you elect COBRA insurance. If they were not covered but you wish to add them, you can do so during open enrollment or if you experience a qualifying event (like getting married) in which the insurance company allows you to add them.

Is there COBRA insurance available in my state?

Many states offer COBRA insurance plans that extend benefits beyond the typical federal COBRA insurance options. These plans are many times known as mini COBRA plans. Typically they provide coverage to people at companies with between 2-19 employees and sometimes offer extended benefits beyond the typical 18 months. Click here to learn if your state offers a state sponsored COBRA insurance plan.

What are my options if I can’t afford COBRA insurance?

You actually have many options if you can not afford the COBRA insurance monthly premiums. The cheapest insurance plans that are alternatives to COBRA insurance are short term, catastrophic health insurance, and high deductible insurance plans. However, many people also find they can find a private health insurance plan that is also cheaper and provides more comprehensive health insurance coverage. Get alternative and more affordable health insurance quotes.

How long do I have to enroll in COBRA insurance?

Under the federal COBRA insurance law, you have 60 days from the date of notification to decide if you would like to enroll in COBRA. Once you decide to enroll, you will have to pay the premiums back until the date on the election form. That means if you wait the entire 60 days, you will need to pay 2 months of the premium to activate your COBRA health insurance.