COBRA: Providing Stability in Uncertain Times

COBRA (or the Consolidated Omnibus Budget Reconciliation Act of 1985) has been a lifeline for workers and their families facing the challenges of job loss, reduced working hours and certain other life changes by offering a way to maintain their health coverage during uncertain times. 

As we observe COBRA’s 38th anniversary, here are five reasons why COBRA matters:

1. Seamless Health Coverage: Transition periods between health coverage – such as when you lose health coverage as a result of changing jobs – can be challenging, especially if you or your family members have ongoing medical care. COBRA allows you and your covered family members to continue health coverage and see your trusted doctors and other providers.

2. Family Coverage: It's not just about you as the covered worker. COBRA covers any of your dependents who were covered under the health plan when your coverage terminated, such as your spouse, former spouse, or children, regardless of whether you choose to elect COBRA coverage for yourself.  They each have the right to elect COBRA coverage for themselves.

3. Time for Enrollment and Payment: With a 60-day window to enroll in COBRA after the end of job-based benefits, you have time to make informed decisions about your health coverage and that of your family. COBRA coverage is retroactive to the day your prior coverage ended. For instance, if your job-based benefits end on March 1 and you enroll in COBRA on April 1, your coverage will still be effective from March 1. Generally, your first premium payment will be due no later than 45 days from when you elect COBRA coverage.

4. Flexible Long-Term Protection: While COBRA is a temporary health coverage solution, in most cases, it offers coverage for up to 18 to 36 months. This extended coverage provides time for you to explore other health coverage options, such as coverage through the Marketplace or through a new job or a family member’s coverage. Keep in mind that COBRA coverage may require that you pay the full group rate premium out-of-pocket plus a 2% administrative fee. It's important to consider the costs and compare to other options when evaluating COBRA as a health coverage option. 

5. Coverage When Life Events Happen: COBRA allows you and your family members to continue health coverage when it's needed most – not only during job transitions but also for other life events such as divorce, legal separation, or the loss of dependent child status (such as when a child turns age 26 and loses coverage under your plan).

On this year’s COBRA anniversary, let's recognize how it provides stability and support to workers and their families during tough times. To learn more about your rights and your (former) health plan’s responsibilities, visit our COBRA resource page. You can also check out "An Employee's Guide to Health Benefits Under COBRA" for more information on how COBRA can help you and how to evaluate your options for health coverage so that you can make sure that you and your family members remain covered.  Life happens – make sure that you have coverage in place as you go through these different changes and stages.

If you have questions about COBRA, EBSA’s benefits advisors are available to assist. You can contact benefits advisors online or by calling 1-866-444-3272.

Lisa M. Gomez is the assistant secretary of the Employee Benefits Security Administration