If you recently left a job with group health insurance you may be able to continue the same coverage you held with your employer by paying the full cost of the insurance. This coverage option is named COBRA because of the federal legislation (Consolidated Omnibus Budget Reconciliation Act of 1986) that established the extension of employer-based coverage.
How It Works
COBRA coverage is an option for those experiencing voluntary or involuntary separation from an employer with 20 or more employees that maintains a group health plan. New York State law also requires smaller employers (those with 2-19 employees) to provide continuation of group coverage benefits to qualifying individuals.
Under both federal and New York State law, your employer or benefits administrator has an obligation to inform you of your right to continue coverage. Continuation of coverage is also available for family members of employees who qualify because of death, divorce, and other life events. Individuals and families opting for continuation of coverage under federal or New York State law must elect coverage within a specified time period (normally 60 days after receiving notice of COBRA eligibility) and pay the applicable premium.
Costs
Qualifying individuals seeking to extend coverage under a group health plan must pay the full premium amount. A small administrative fee is also allowed, bringing the total premium cost to 102% of the cost of coverage under the employer's group health plan.
COBRA coverage is expensive because those purchasing it must pay both the employee and employer share of the insurance. Many employees are not aware of how much employers pay in monthly premiums for individual and family coverage of their employees. While expensive, COBRA coverage is an important option to consider because unless you have access to another group health plan it is likely to be the most comprehensive coverage you will get for the price.
Available Subsidies
Individuals eligible for COBRA continuation coverage as a result of involuntary job loss may qualify for federal assistance provided by the American Recovery and Reinvestment Act of 2009. Qualifying beneficiaries of the economic stimulus legislation may receive a 65% premium subsidy for up to 9 months.
New York State residents working in the entertainment industry may also be able to reduce their COBRA costs by accessing premium subsidy support under the State's Health Insurance Continuation Assistance Demonstration Program
For More Information
For more information on your health care options under COBRA, contact your employer or the following:
United States Department of Labor
New York State Insurance Department
