What is the COBRA Plan and Why is It Important?
When life takes an unexpected turn—such as job loss, reduced hours, or major life changes—health insurance continuity becomes a serious concern. That’s where the COBRA plan plays a critical role.
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows individuals to temporarily keep their employer-sponsored health insurance after experiencing a qualifying life event.
How Does COBRA Work?
When you’re eligible, COBRA allows you to continue your current group health plan for up to:
18 months after job loss or reduced work hours- 36 months after divorce, death of a covered employee, or a dependent aging out
Note: You’ll pay the full premium yourself—including the employer’s portion—plus a 2% administrative fee.
Who Is Eligible for COBRA?
COBRA applies to employers with 20 or more employees offering group health plans. You may be eligible if you’re:
An employee who lost a job (except for gross misconduct)
A spouse or ex-spouse of the covered employee
A dependent child who was covered under the plan
Why Is COBRA Important?
COBRA plays a vital role in maintaining healthcare access during uncertain times. Here’s why it matters:
Continuity of Care – Keep seeing the same doctors and continuing treatment without disruption.
Temporary Bridge – Helps you stay covered between jobs or while transitioning to another plan.
Peace of Mind – Reduces anxiety during stressful life changes by preventing loss of coverage.
Legal Protection – Your right to continue coverage is protected under federal law.
Is COBRA Always the Best Option?
Not always. While it ensures seamless continuity, COBRA can be costly because your employer no longer contributes. Consider these alternatives:
Joining your spouse’s health plan
Exploring plans on the Health Insurance Marketplace
Checking eligibility for Medicaid- Tip: You have 60 days to decide after becoming eligible. Use this time to compare options carefully.
Final Thoughts
COBRA gives individuals and families a lifeline by allowing them to continue health coverage in the face of major life changes. It’s not always the most affordable path, but it is a dependable one—especially when you need time to explore your next steps.
Need help navigating your COBRA options?
Talk to our team of insurance experts and get clear, customized advice to protect your health and peace of mind.