How Long Can A Person Use COBRA Insurance (And Why?)

Exact Answer: Up to 18 months

COBRA is a federal law that briefly allows one to enjoy their health insurance privileges after losing or quitting a job.

Sudden unemployment or reduction of work hours consequentially results in losing your health insurance coverage. More often than not, it can be seemingly impossible to find affordable individual insurance.

The Consolidated Omnibus Reconciliation Act was passed by Congress, allowing a person to keep their employer-sponsored health insurance coverage after losing a job. However, the COBRA insurance is temporary and only aims to bridge the gap between your old health insurance and the one you go for next.

How Long Can A Person Use COBRA Insurance?

COBRA generally permits a person to keep their health insurance coverage sponsored by their former employer for up to 18 months.

Though under special circumstances, the spouse or dependents of the covered employee may extend their COBRA plan beyond the minimum requirement. Therefore, the duration of coverage relies on the qualifying event and the participant.

Commonly, the dependent of a covered employee can opt for COBRA coverage if in case the employee passes away or gets a divorce from their spouse. Furthermore, a dependent child of the covered employee becomes eligible for a COBRA plan after losing the rights to stay on their parent’s plan at age 26.

Covered employees who enlist in the military enjoy 24 months of coverage rights for themselves and their dependents under the Uniformed Services Employment and Reemployment Rights Act (USERRA).

Qualifying EventDuration of Coverage
loss of job/ reduced hours18 months
enlistment in military24 months
For covered employee
Qualifying EventDuration of Coverage
dependent with disability29 months
a dependent child turning 2636 months
death of a covered employee36 months
divorce from a covered employee36 months
for the dependents of covered employee

Why Can A Person Use COBRA Insurance This Long?

The length of time a person can continue COBRA coverage depends on their qualifying event. For a former employee and their dependents, the coverage lasts up to 18 months if their employment ends for any reason other than gross misconduct. The reason for termination may be voluntary or involuntary, including retirement.

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A former employee becomes eligible for an extended coverage of 11 months if they develop a disability within the first 60 days of receiving coverage. Therefore, the employee may get up to 29 months coverage in such a case as determined by the Social Security Administration.

The aforementioned time periods of coverage are also applicable for the employee’s qualifying beneficiaries – precisely the spouse and dependents of the covered employee.

In addition, the qualifying dependents are granted a total of 36 months of coverage in case a second qualifying event happens during the first 18 months.

They become eligible for an extension only if the second qualifying event stems from – the death of the covered employee, a divorce between the employee and their spouse, an adult child losing their dependent child status in accordance with the rules of the health insurance plans – or if the covered employee becomes eligible for Medicare.

COBRA plan generally expires at the end of the coverage period as set by the law. However, a participant may withdraw from the plan early at their own will and need not commit to the 18-month duration. Additionally, a participant’s coverage can end prematurely in the following cases:

  1. The participant fails to pay their premiums on time.
  2. The employer terminates their group health plans.
  3. The participant gains coverage under another group health plan, becoming eligible for Medicare.
  4. The participant is no longer considered disabled by the SSAThe participant engages in gross misconduct.

Conclusion

COBRA is a temporary coverage plan. It is purposely formulated to support a participant in the period between them losing health insurance and finding new coverage. The participant is required to sign up for COBRA within 60 days of losing the benefits from their old plan.

According to federal law, COBRA applies to firms with 20 or more employees. However, some states enable COBRA coverage in firms with fewer employees.

Reference

  1. https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/sanlr24&section=8

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