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Losing your job can leave you without health insurance. insurance collects is a way to maintain coverage, but it comes at a high cost.

It’s smart to know the pros and cons of health insurance charges, how much it costs, how to qualify, terms, and alternatives to consider.

Reading: How much does it cost for cobra health insurance

understanding insurance charges

cobra is a federal law that stands for “the Consolidated Omnibus Budget Reconciliation Act.” Cobra gives you the right to stay enrolled in a group health insurance plan if you meet Cobra’s requirements.

This allows people who quit, lose their job, or qualify due to a special circumstance to temporarily continue their employer-sponsored group health insurance coverage by paying the full health insurance premium themselves (including the employer).

cobra allows workers who leave employment at a company with 20 or more employees to maintain group health coverage with their former employer for 18 months or more after employment ends. Many states also have “mini-cobra” laws that apply to businesses with fewer than 20 employees.

Employees whose work hours fall below the group health insurance eligibility threshold may also qualify for up to 18 months of Cobra, according to Bryan Clickener, senior account executive at RSC Insurance Brokerage.

cobra primarily targets employees who have lost or left their jobs, but also applies to others who have “qualifying events” that caused them to lose health insurance.

qualifying events also affect other family members on health plans, including a spouse or child, including:

divorce
have a child who turns 26 and is out of family coverage
an employee dies and covered family members want to keep employer coverage
employee becomes eligible for medicare and family members on the plan want to keep the employer’s plan

pros and cons of health insurance charges

cobra offers some benefits:

Coverage is effective immediately, with no waiting period after the qualifying event.
It’s the same coverage you had with your employer.
You don’t have to change doctors or see if your current doctor accepts the plan.

In addition, cobra insurance can be helpful after losing a job if you or a family member on the plan has a chronic health condition, ongoing health problems, or necessary treatments in progress that require maintaining predictable coverage and a reliable network of providers. .

“cobra may also be your best option if you’ve met your annual deductible and expect to need medical care or prescription drugs for the rest of the year,” says cindy george, personal finance editor at goodrx in houston. cobra also has its drawbacks:

Your former employer may not help you pay your premiums. in most cases, he must pay 100% of the total premium (his share and his former employer’s share), as well as a 2% administrative fee to maintain coverage. Paying the entire bill yourself could be a major struggle, but it’s probably better than no health insurance at all.
coverage charges expires. it usually lasts 18 months, but can be extended to 36 months, depending on the situation. after that time, you’ll have to look elsewhere for health insurance.

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how much does the insurance charge?

cobra typically leaves the former employee bearing all costs for health insurance coverage, which was $7,739 on average for individual coverage from an employer-sponsored health plan in 2021, according to the foundation of the kaiser family.

Using this average expense, it would likely cost an employee $645 per month to continue employer group health insurance coverage through Cobra.

The cost of family coverage was $22,221 on average, which would cost $1,852 per month without employer help. those estimates also do not consider a potential 2% administrative fee.

what you pay depends on your employer’s group health insurance plan and will be explained in your cobra election notice. You must receive the election notice within 14 days of quitting, losing your job, or qualifying due to a special circumstance.

related: how much does health insurance cost?

who is eligible for cobra insurance?

You may qualify for collect coverage if:

You were enrolled in your employer’s group health insurance plan.
Your employer has at least 20 employees.
Your employer group health insurance plan remains active.
a qualifying event caused you to lose coverage, including voluntary or involuntary job loss, a decrease in hours worked, being involved in a divorce, or if you die and your family needs health coverage.

what is the deadline to take out the cobra insurance?

Generally, you have at least 60 days from the date you receive a cobra election notice from your former employer or the date you would lose health care coverage, whichever is later, to enroll in cobra.

You have that 60-day window to decide to charge. even if you initially decline charges, you can sign up later if it’s within 60 days.

cobra coverage begins as soon as you become eligible. You can elect Cobra at any time during the eligibility period, and coverage is retroactive whether you elect coverage on day 1 or day 59. That means if you need health care services on day five but don’t enroll until day 50, charges the plan will continue to cover the services because you were eligible for charges coverage.

how to apply for cobra insurance

When you qualify for cobra based on a qualifying life event, you must receive a cobra election notice within 14 days of your qualifying event. This notice gives details about the deadlines and rules, including:

how to sign up for cobra
how soon do you have to make your cobra decision
how to notify your plan administrator
the date cobra coverage will begin
the maximum duration of coverage
your monthly payment
payment due date

“the employee, spouse or family member who qualifies for cobra must complete the application for coverage form that comes with the cobra election notice and make a payment within 60 days, and make a payment within a specific time, usually within 45 days of the cobra election,” says Michael Arrigo, CEO of No World Borders, a company that specializes in health care data, regulation, and economics.

when do you lose cobra eligibility?

Your cobra eligibility expires if you do not apply for cobra by the due date indicated on your cobra election notice.

once cobra coverage is in effect, you are generally eligible to continue coverage for up to 18 months, depending on why you are eligible for cobra.

cobra health insurance will end if you stop paying your monthly cobra premiums in full or if you turn 65 and become eligible for medicare coverage.

This is the maximum time you can keep cobra insurance based on the qualifying event and person.

How long can an employee or former employee keep a salary?

How long can the spouse of an employee or former employee have a cobra?

How long can a dependent child of an employee or former employee have a salary?

arrigo says “mini-cobra” plans, which apply to businesses with fewer than 20 employees, are offered in 40 states. a state can also expand cobra eligibility.

“Coverage for the employee can also last up to 36 months if state-based mini-cobra coverage applies,” says Arrigo. “For example, you may be eligible for 18 months under the federal Cobra law and an additional 18 months if you live in California and qualify for Cal-Cobra,” Arrigo says.

States with mini-cobra plans for small employers include:

arizona
arkansas
california
red
connecticut
delaware
district of colombia
florida
georgia
illinois
iowa
kansas
kentucky
Louisiana
main
maryland
massachusetts
minnesota
mississippi
missouri
nebraska
new hampshire
new jersey
new mexico
new york
north carolina
north dakota
ohio
oklahoma
oregon
pennsylvania
rhode island
south carolina
south dakota
tennessee
texas
utah
vermont
virginia
west virginia
wisconsin
wyoming

mini-cobra eligibility and how long you can keep coverage vary by state.

alternatives to collect insurance

If you lose your employer’s insurance, you have other options besides getting paid. you can also:

are added to a spouse’s health insurance plan.
sign up for an Affordable Care Act (aca) Marketplace plan.
buy an individual health insurance plan directly from an insurance company.
sign up for medicaid (if you qualify).
Buy a short-term health insurance plan, which is low-cost but also has limited benefits.

Enrolling in your spouse’s health insurance plan may be the most affordable way to get comprehensive health insurance. Losing your employer coverage usually triggers a special enrollment period where you can be added to your spouse’s health insurance.

Another option is a plan here. Natasha Cantrell, director of individual and family sales for eHealth, says ACA considers losing employer coverage a qualifying life event, giving you a 60-day window to enroll in a plan ACA instead of waiting for the period open enrollment.

“Depending on your estimated annual income, you may qualify for subsidies under the ACA that can significantly reduce your monthly premium. People who buy health insurance on their own without subsidies can face monthly premiums in the range of $400 to $600, but those who qualify for subsidies can pay less than $100 a month,” Cantrell says.

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