How COBRA works

Understanding COBRA if you lost your health insurance through work

When you have a job change, you might hear the term Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). It sounds complicated, but COBRA may be a big help if you need health insurance when your job changes unexpectedly. Here’s what you need to know if you’re thinking of using COBRA to keep your insurance while you may be looking for a new job.

Do I qualify for COBRA?

You may qualify for COBRA coverage if your job or life situation has changed. Here are some of the ways you may qualify:

  • You lost your job, either voluntarily or by the decision of your company (for any reason except gross misconduct) and you have lost your health coverage
  • You had the number of hours per week you work reduced so you no longer get benefits and you have lost  your health coverage
  • You experience a qualifying event, such as the death of the covered employee, a divorce or legal separation from the covered employee or another event that may entitle you to COBRA coverage

What’s covered under COBRA?

With COBRA, you can continue the same coverage you had when you were employed. That includes medical, dental and vision plans. You cannot choose new coverage or change your plan to a different one. For example, if you had a medical plan and a dental plan, you can keep one or both of them. But you wouldn’t be able to add a vision plan if it wasn’t part of your plan before COBRA.

How do I pay for COBRA?

Under COBRA you’ll have to pay the full premium for your coverage, plus an administrative fee. When you’re employed, your employer generally pays for some of the cost of your health insurance. That means you’ll likely be paying more for COBRA – and it may get expensive, depending on the kind of coverage you have. 

What are COBRA coverage limits?

COBRA coverage is only a short-term solution, so it’s a good idea to explore other options. Besides the general time limit of 18 to 36 months, there are a couple of other reasons your COBRA coverage can end.

  • You don’t pay your premiums on time.
  • Your former employer stops offering any group health plans.
  • You get comparable coverage through a new job.
  • You become eligible for Medicare.

COBRA coverage under the American Rescue Plan Act of 2021 (ARPA)

On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed. This act includes a 100% subsidy for COBRA continuation coverage premiums for: 

  • Those who experienced involuntary job loss
  • Those who experienced a reduction in hours of work leading to a loss in coverage

In other words, federal COBRA, premiums would be covered at 100% for assistance eligible individuals (AEI), as defined under the Act, from April 1, 2021 through September 30, 2021. 

COBRA frequently asked questions (FAQ)

Looking for more information on COBRA? Review our frequently asked questions to learn more. 

 

UnitedHealthcare Exchange plans

Learn about Affordable Care Act (ACA) or Marketplace plans.

Short term health insurance plans

In times of change, find short term solutions that help you bridge the gap.

Footnote

  1. Read more about COBRA health coverage from the United States Department of Labor at COBRA Continuation Coverage. Personal or individual insurance is not the same as COBRA, so review your health insurance information carefully. Your time to elect COBRA is limited by law. Failure to elect and exhaust COBRA may eliminate your eligibility to enroll under HIPAA portability. You may have additional rights under state law.