COBRA — Consolidated Omnibus Budget Reconciliation Act
A federal law that allows workers and their families to continue employer-sponsored health insurance coverage for a limited period after losing a job or.
Official source: dol.gov
COBRA is a federal law that allows workers and their families to keep their employer-sponsored health insurance for a limited time after certain events. These events can include losing a job (unless it was due to gross misconduct), having hours reduced, getting divorced, the death of the covered employee, or a dependent aging out of the plan.
Typically, COBRA coverage lasts for 18 months, but it can be extended to 36 months in some situations. While this option helps maintain health coverage, it can be costly. Individuals must pay the entire premium, which includes both the employer's and the employee's share, plus an additional 2% for administrative fees.
Worth checking alternatives first —, as options like ACA Marketplace plans, Medicaid, or short-term coverage might be cheaper. Understanding these choices can help make informed decisions about health insurance after a qualifying event.
In real life
- A person who quits their job can keep their health insurance for a while through COBRA.
- Someone whose hours are cut can use COBRA to keep their health insurance plan.
- A family that loses employer-sponsored health insurance can use COBRA to continue their coverage.
Also known as
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Frequently asked questions about COBRA
What is Consolidated Omnibus Budget Reconciliation Act (COBRA)?+
A federal law that allows workers and their families to continue employer-sponsored health insurance coverage for a limited period after losing a job or experiencing another qualifying event. Qualifying events include: job loss (not for gross misconduct), reduction in hours, divorce, death of covered employee, and dependent aging off plan.
Who qualifies for COBRA?+
Anyone without affordable job-based coverage, Medicaid, or Medicare can shop the Marketplace. Subsidies depend on household income.
How do I apply for COBRA?+
Apply during Open Enrollment (Nov–Jan) or after a qualifying life event at healthcare.gov, or through your state's Marketplace.
Where can I get help?+
Compare plans and check subsidies at healthcare.gov, or call a free local Navigator listed there. BenefitKarma's free Benefit Eligibility Screener can also tell you if you qualify for Medicaid instead.
Source: dol.gov