It’s a frustrating fact that affordable health insurance is often tied to employment status in the U.S. Starkly put: if you lose your job, prepare to pay your doctor out of pocket.
COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation insurance aims to bridge this gap. Under COBRA, employees who lose their jobs or suffer reduced hours can still access employer-sponsored health insurance…temporarily, anyway.
Which begs the question: Can you extend COBRA continuation coverage?
What is COBRA insurance?
COBRA is a federal law that ensures many private-sector and certain public-sector employees can maintain healthcare coverage after losing their job. (Some states also have “mini COBRA” plans that widen the eligibility net.)
Under COBRA laws, group (employer-sponsored) health plans must provide temporary continuation coverage for:
- Eligible employees and ex-employees
- Current, separated, or recently-divorced spouses
- Dependent children
COBRA access kicks in when these individuals would otherwise lose health insurance due to reduced hours or job loss. However, since COBRA laws permit employers to shift premiums to plan dependents, it can be prohibitively expensive. (Hence, why so many people ask if COBRA is worth the cost.)
Who is entitled to COBRA continuation coverage?
Typically, you’re eligible for COBRA coverage if you meet three criteria:
- COBRA covers your group health plan
- You’re a qualified beneficiary (a covered employee, current or divorced spouse, or dependent child)
- A qualifying event occurs*
- For employees: Termination or reduced hours for reasons other than gross misconduct
- For spouses and dependents: The covered employee suffers reduced hours, is terminated, becomes eligible for Medicare, or gets divorced
- For dependents: The child ages out of “dependent” status
*In some cases, you may qualify for COBRA coverage even if you quit your job!
How many months can you get COBRA insurance?
How long you can access COBRA coverage depends on your beneficiary status and the qualifying even. Generally, you can expect to receive COBRA for:
- 18 months when an employee loses their job or suffers reduced hours
- 36 months when an employee becomes entitled to Medicare within 18 months of the qualifying event
- 18 months in most other qualifying circumstances
That said, these are only legal minimums – individual plans may provide extended coverage options.
Can I extend COBRA insurance past 18 months?
Typically, you can’t extend COBRA insurance past your initial timeframe – with two exceptions:
1. When a beneficiary is disabled
If one COBRA beneficiary is declared disabled by the Social Security Administration, all beneficiaries may receive an 11-month extension. (Grand total: 29 months of continuation coverage.)
However, you have to meet extra requirements regarding the disability in question. The plan may also charge up to 150% the cost of coverage during the 11-month extension period.
2. When a second qualifying event occurs
COBRA beneficiaries who qualify for 18 months upfront may receive an extra 18 months if a second qualifying event occurs. (Grand total: 36 months of continuation coverage.)
Secondary qualifying events are typically limited to:
- The covered employee’s death
- Divorce or legal separation
- A child losing dependent status under the plan
- A covered employee becoming entitled to Medicare (provisionally)
Don’t miss your premium payments!
A word of caution: to your COBRA coverage, you have to stay current on your premiums. Missing your first premium payment means losing your COBRA coverage – permanently. (Missing later payments also revokes coverage, but you can reinstate access by catching up within 30 days.)
Consider pairing COBRA with a gap year
Reduced hours or job loss can drastically alter your income and budget. But with COBRA coverage, you can keep your coverage long enough to find something better.
And sometimes, getting laid off – or quitting – might just be the kick you need to take a career break. If you have the means, pairing COBRA coverage with a “gap year” (voluntary or otherwise) can keep you healthy while you enjoy your family, pick up a hobby, or explore a new career.
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