How to Get COBRA Health Insurance Coverage

Who qualifies for COBRA health insurance coverage and how to make it more affordable.

Laura Adams, MBA,
Episode #189

When I say “cobra” do you conjure up a vision of a scary snake being hypnotized by a guy playing a flute and wearing a turban? Well, when it comes to healthcare, COBRA is something very different. In fact, it's what you'll need if you get bit by a snake after you leave your job! In this article I'll tell you who's eligible for COBRA, how to get it, and how to make it more affordable.

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What Is COBRA Health Insurance?

COBRA is an acronym that stands for Consolidated Omnibus Budget Reconciliation Act. Even though the name of the law doesn't mention anything about healthcare or insurance, it provides a temporary continuation of group health benefits that would ordinarily be canceled when you leave a job. COBRA insurance gives you the exact same benefits and choices you had before you left your company. 

Who Is Eligible for COBRA Health Insurance?

In order to receive COBRA health insurance benefits, you and your employer must meet certain criteria. Your employer must provide a group health plan and have at least 20 or more employees on the payroll. Employees and independent contractors who participate in a group health plan are eligible for COBRA benefits when they voluntarily leave a job, have their work hours cut so they lose benefits, or are terminated for any reason other than gross misconduct.

Spouses and dependent children of former employees can also receive COBRA benefits when the covered worker:

  • dies,
  • is eligible for Medicare, or
  • gets legally separated or divorced.

Additionally, children can receive COBRA benefits when they're no longer a dependent of the covered worker according to the rules of the group health plan.

How Do You Get COBRA Health Insurance Coverage?

In order to receive COBRA coverage, employees must notify their Human Resources department (or the employee who administers health insurance) within 30 days after one of the events that I mentioned, such as a termination or a cut in work hours. Beneficiaries of a qualified worker have up to 60 days to elect COBRA coverage after a qualifying event, such as a divorce.

After you notify your former employer that you want COBRA health coverage, they have to send you an election notice within 14 days. After you receive the notice, you (or your beneficiaries) have up to 60 days to decide whether or not to take the coverage. If you don't make a decision by that time you may lose your right to claim COBRA benefits.


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