About half of Americans have employer-sponsored health insurance. Medical coverage is a specific benefit that companies provide for full-time employees. This health care coverage is conditional on working for the employer.
So, what happens when employees lose their jobs or need to quit? The Consolidated Omnibus Budget Reconciliation Act (COBRA) may be an option for those who need medical cover while between jobs. Check out everything you need to know about COBRA coverage.
What is COBRA insurance, and how do you qualify for it? COBRA gives you temporary health insurance coverage for a limited time. Whether you are eligible for COBRA coverage will depend on your employer-based policy.
The federal government requires any company with more than a certain number of employees to provide COBRA health insurance. If you have insurance from a business with 20 or more workers, you should be eligible for COBRA coverage should you separate from your position.
Specific factors can influence if your employer is legally responsible for providing COBRA-covered health insurance. For example, your employer may have more than 20 workers but only during one season. Businesses with more than 20 employers for less than half of their typical workdays annually may not provide COBRA-covered coverage.
You may not be eligible for COBRA coverage if you work for yourself or a small company with fewer than 20 employees. Likewise, COBRA insurance does not cover employees who do not have employer-sponsored insurance or are employed by the federal government or a religious organization.
However, some state governments require small businesses to provide COBRA as an option if an employee separates from their position. Separation can be resigned, terminated, retired, or died.
You may also be eligible for COBRA insurance if your spouse or parent qualifies. Employees, spouses, and dependents may qualify for coverage if they lose their health insurance due to:
- The death of a covered spouse or parent.
- The termination of employment for any reason except gross misconduct.
- A cut in work hours to part-time for any reason except gross misconduct.
- A legal separation or divorce from a covered spouse.
- An adult child losing dependent status to a covered parent.
- A covered employee signing up for Medicare.
If your boss fires you for gross misconduct, however, you may lose your COBRA eligibility. Similarly, you may no longer qualify for coverage if your employer ceases to maintain any group health plan.
COBRA must cover your employer-sponsored health plan for you, your spouse, and dependents qualify. If you think that you are eligible for COBRA health insurance after being fired or left voluntarily, you must apply.