COBRA Overview

What is COBRA and how does it apply to me?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.

 

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COBRA Overview

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.

COBRA vs. Medicare

Having Medicare Part A and Part B is usually more affordable than COBRA, and covers you for the rest of your life.  Medicare only covers you, while COBRA will cover your spouse and dependents, and may also cover more services than Medicare. 

COBRA vs. Medicare Part D Coverage

Prescription drug coverage is typically included in a COBRA plan.  When you enroll in Medicare, you will need to buy a Medicare Part D plan or stay with your COBRA plan.  However, COBRA is only temporary, and you will be required to get drug coverage or a Part D plan when your COBRA expires.  If you don’t, you may be subject to a late enrollment penalty.