COBRA and ERISA

COBRA

Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a law passed by the U.S. Congress, that mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving the job, even if you quit or are fired. COBRA includes amendments to the Employee Retirement Income Security Act of 1974 (ERISA).

COBRA allows an employee who has been fired, changed jobs, or got divorced the ability to continue their health insurance for a limited time. It also applies to the family of a deceased employee. There are some legal requirements and time limits, so it’s a good idea to investigate COBRA right away if you are in one of these circumstances.  You have 60 days to enroll starting from the later of the date that coverage would have been lost or the date that the official COBRA letter was mailed.  If you sign up during the 60 day period, coverage (and premiums) can be retroactive.

COBRA coverage can continue from 18 months if you quit or a lose a job or your hours are reduced, and up to 36 months if the insurance loss was due to other reasons. In most cases, your COBRA premium will be the group rate that the company pays, however you will have to pay the entire amount without the subsidy that most companies offer active employees.  It can be expensive.  Check to see if your spouse can get insurance at their job, or it’s often less expensive to sign up through the Affordable Care Act or your state’s health insurance marketplace.  The listings are at http://healthcare.gov  The normal enrollment period is waved for most COBRA eligible people and you can sign up any time.