The Complete Guide To COBRA Insurance: Top 7 Questions Answered

April 3, 2023


The Complete Guide to COBRA - Top 7 Questions Answered by Revolt Healthcare Alliance Frisco, TX
When you leave a job (or are let-go from a position), it’s important to make sure you have adequate, affordable health insurance coverage in place for the time you’re between jobs. 

There are many health insurance options that you can utilize to make this transition period a lot less stressful.

One of the first options that Americans consider is usually COBRA insurance.

While this insurance option has its time and place, it is definitely not for everyone. 

Let’s look at what COBRA is and how it works, so that you can select the health insurance that is best for you.

What is COBRA?

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a landmark federal law passed in 1985. It requires most employers with 20 or more employees to offer continuation of coverage to employees (and their families) who would lose health insurance coverage due to certain qualifying events, such as job loss, reduction in hours, or divorce.

The law allows workers to maintain continuity of coverage and avoid gaps in their health insurance. The employer must notify the health insurance plan administrator within 30 days of a qualifying event (like an employee quitting). Eligible employees get 60 days to elect COBRA for coverage.

COBRA is not a government-provided healthcare program. It simply allows you to keep the same healthcare coverage that you had while you were employed. 

This means that you will continue to pay the same deductibles, and copays that you did while you were employed. However, your employer will no longer pay their portion of your premiums. Which means you will be responsible for paying the entire cost of your health insurance premium every month.

Some states have their own laws that require smaller employers to offer similar coverage. The states that currently have mini-COBRA laws for small employers include: California, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, and Wisconsin.

It’s worth noting that the specific requirements and eligibility criteria for mini-COBRA coverage can vary by state. Consult your state’s laws or speak to a licensed insurance agent to get more information about your rights and options.

What Does COBRA Cost - woman counting money

How much does COBRA cost?

COBRA can be expensive because you’re responsible for paying the entire monthly premium. This new premium includes the portion that your employer previously paid on your behalf, plus a 2% administrative fee. 
According to the Kaiser Family Foundation, premiums for employer-sponsored family health coverage reached $21,342 this year, (or $1,778.50 per month) with workers on average paying $5,588 (about $465 per month) toward the cost of their coverage. On COBRA this same family would pay both their premium AND their employers, plus a 2% administrative fee, for a total of about $2,288 per month. 
Your final cost of COBRA coverage will vary depending on the group health insurance plan that you were enrolled in, as well as your location. COBRA premiums are often a significant expense, making it important to consider alternative options.
Why Might Someone Use COBRA - Doctor taking patients blood pressure

Why might someone use COBRA?

Continuity of care:

If you have pre-existing conditions (like a recent heart attack, stroke, certain forms of cancer, or if you’re pregnant or may become pregnant) or you are in the middle of treatments, COBRA can allow you to keep your current doctors and medical providers.

Short-term coverage:

COBRA allows you to continue your employer-sponsored health insurance plan for a limited period of time, typically up to 18 months. This can provide enough coverage until you get a new job or qualify for a new health insurance plan.

Happy with coverage:

If you're happy with your current employer-sponsored plan, you can continue using it for a limited period of time - even if you're no longer employed.

Family coverage:

Family members who were covered under your employer-sponsored health plan and have pre-existing conditions or are in the middle of treatments may also be eligible for COBRA continuation coverage.

Why Might Someone Not Use COBRA - Happy doctors smiling

Why might someone not use COBRA?


As we mentioned earlier, COBRA can be expensive because you're now responsible for paying the full cost of the health insurance plan, including the portion that your employer previously paid, plus a 2% administrative fee.

The total monthly premium can be shocking. Especially for former employees who were accustomed to having their portion of the premium deducted from their paycheck.

If you're not able to afford the new monthly premium, COBRA may not be a viable option - especially when there are other, more affordable private options available. You can see the difference by requesting a private health insurance quote!

Limited timeframe:

COBRA only allows you to continue your employer-sponsored health insurance plan for a limited period of time, typically up to 18 months. If you need longer-term coverage, you'll need to find another health insurance option.


COBRA is only available to employees of companies with 20 or more employees. If you work for a smaller company, you may not be eligible for COBRA continuation coverage. There are some states that offer mini-COBRA coverage for smaller companies.

Other more affordable options:

Depending on your situation, there may be other health insurance options available to you. A spouse's employer-sponsored health insurance plan, a private health insurance plan, or  even a government-sponsored health insurance program like Medicaid could be viable options.

Top 7 Frequently Asked COBRA Questions - Hands raised to ask questions

Top 7 Frequently Asked Questions About COBRA Insurance:

Who is eligible for COBRA benefits? How do I qualify for COBRA?

To be eligible for COBRA benefits, you must have been enrolled in a group health plan sponsored by your employer. You are eligible if you experience a qualifying event, such as getting laid off from work or decreasing work hours. It does not matter whether you quit your job or were fired. Any termination of employment qualifies you for continued coverage under COBRA. 

Even retirement or the divorce/death of the spouse whose employer-sponsored plan you were on, qualifies you for coverage under COBRA. Your spouse and dependent children may also be eligible for COBRA coverage if they were covered under your employer-sponsored plan.

How long can I keep COBRA coverage?

COBRA is meant to be temporary. It will allow you to keep your current health insurance coverage (including medical, dental, and vision) for 18, 29, or 36 months. Certain extensions like disability, military service, or a second qualifying event can increase coverage beyond those standard time periods.

The length of the extension depends on the event that triggered the need for COBRA and other factors, such as the employer's size. It's important to note that COBRA extensions are not automatic and you must apply for them within the specified timeframes. Additionally, COBRA extensions may have different premium rates and eligibility requirements.

How Do I Enroll in COBRA Coverage?

To enroll in COBRA coverage, you must notify your former employer within 60 days of a qualifying event. Once your employer notifies the plan administrator, you'll receive information about how to enroll in COBRA coverage and the costs involved.

Your employer should have provided you with COBRA enrollment information when you experienced a qualifying life event. If you have not received this information, you should contact your employer's human resources department.

Can I switch to a different health insurance plan while on COBRA?

Yes, you can cancel your COBRA insurance anytime, but you may not be able to switch back to your employer-sponsored plan once you do.

It's important to carefully consider your options before making a switch. If you do decide to switch to a new health insurance plan, notify your COBRA administrator as soon as possible to avoid any gaps in coverage.

Will COBRA insurance be backdated?

Yes, in certain situations COBRA insurance can be backdated. When you enroll in COBRA, you can request that your coverage be backdated to the date of your qualifying event. This means that your COBRA coverage will start on the date you lost your job, rather than the date you elected COBRA coverage.

Backdating your COBRA coverage can be advantageous, if you had medical expenses between the date of your qualifying event and the date you elected COBRA coverage. Those expenses may be covered under your COBRA plan if your coverage is backdated.

However, backdating your COBRA coverage can also result in higher premiums. You may be required to pay for the period of time between your qualifying event and the date you elected COBRA coverage. It's important to carefully consider the potential benefits and costs of backdating your COBRA coverage before making a decision.

Is COBRA Insurance Good?

While COBRA insurance may be a helpful option, it is not mandatory. How "good" this option is will depend on how good your health insurance plan was to start with. Since you are simply opting to pay the full premium + 2% fees for the same plan, all the same copays, deductibles, coverages, and network access will still apply. COBRA will not change the plan itself.

How Can I Avoid COBRA Insurance?

You can avoid COBRA insurance by selecting your own private health insurance plan or shopping for health insurance from

COBRA is a useful option if you'd like to maintain your existing health insurance after leaving a job.

(Especially for people with pre-existing conditions or family members undergoing treatment.)

However, it’s important to count the cost of that coverage and consider all of your options. 

If you find the monthly premiums too high, you can opt for a private health insurance plan or if you have many pre-existing conditions, you can search the marketplace for an ACA plan.

It’s important to carefully consider the costs and limitations of COBRA coverage and explore alternative health insurance options as well.

Use the free checklist below to help you evaluate which health insurance option may be right for you!

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