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U.S. Department of Labor Seal U.S. Department of Labor

Health Benefits Advisor

Former Employer Has 20 or More Employees

If you and/or your family were covered by your employer's or employee organization's group health plan on the last day of your employment, you may each have the right to obtain COBRA continuation coverage at group rates, unless you were terminated for gross misconduct. If that coverage is no longer offered, you will generally be able to obtain whatever coverage your former employer or employee organization (such as a union) now makes available to similarly situated non-COBRA beneficiaries.

Generally, not later than 44 days after losing your coverage, whether it be on or after the day you lost employment or thereafter, you should receive a written election notice from the group health plan explaining your right to elect COBRA continuation coverage. This notice should explain how long you and your family members will have to decide whether or not to elect COBRA continuation coverage. The plan must give you at least 60 days from the date the notice is provided to you, or from the date your coverage ended, whichever is later, to elect COBRA continuation coverage. Each qualified beneficiary will have the separate right to elect COBRA continuation coverage. The election notice should also explain how much you must pay for coverage and when and to whom the payments are due. You may find that COBRA continuation coverage costs more than the coverage you had prior to the termination of your employment because many employers will not continue to pay a share of the cost of your coverage after such an event. However, the premium payment you will make while on COBRA continuation coverage will be at group rates and is generally likely to be less expensive than coverage you would obtain on your own directly from an insurance carrier or HMO (Health Maintenance Organization). For more information, see An Employee's Guide to Health Benefits Under COBRA.

COBRA continuation coverage can generally last for up to 18 months. COBRA continuation coverage may last for up to 29 months if a qualified beneficiary is entitled to the disability extension. However, coverage may terminate earlier if you fail to make timely premium payments, you become covered by another group health plan or Medicare after electing COBRA continuation coverage, your former employer, employee organization (such as a union), or both ceases to sponsor a group health plan, you move or relocate to an area which the group health plan does not serve, or for cause according to the plan rules. If the plan terminates your COBRA continuation coverage early for any reason, the plan must give you a notice explaining why it is doing so and describing the date of termination.

Depending on your circumstances, you and your family members may have health care options other than COBRA continuation coverage available, including coverage through a plan sponsored by your spouse's employer. Before making any decisions, you should carefully consider the information on COBRA continuation coverage and the other coverages for which you and your family members may be eligible to determine which one will best meet your needs. Keep in mind that COBRA continuation coverage is temporary health coverage. In some instances you may be eligible again for certain special enrollment rights once your COBRA coverage expires.

In choosing among the options available to you, you should review the SPD (summary plan description) for each available group health plan to determine which plan best meets your needs. You should also review and compare the information on the other coverages for which you are eligible. In making your decision, you may want to consider such things as:

  1. Any waiting period (or affiliation period) imposed under the plans;
  2. Types of benefits offered (Is dependent coverage available? Do the benefits cover your family's medical needs?);
  3. Cost of coverage (premiums, co-payments and deductibles for prescription drugs and doctor visits);
  4. Limitations on coverage; and
  5. Any exclusions from coverage (treatments, procedures, conditions or prescription drugs).
UNITED STATES
DEPARTMENT OF LABOR