COBRA health insurance is a term that is often heard in workplace conversations, on the television, and in unemployment circles but few people can actually tell you what COBRA health insurance really is. In fact many Human Resources workers who deal with workplace health insurance daily, struggled to say much more about COBRA health insurance than it is something people can use after losing their job. COBRA health insurance actually involves a lot more than that and it is extremely important for anyone who recently lost, quit, or retired from their job to fully understand it. It can also benefit anyone going through a divorce or who will soon lose their dependent child status.

What is COBRA Health Insurance?

COBRA health insurance is a law, not an insurance plan, that was passed by the United States government in 1986 to prevent people from suddenly losing their health insurance. The law states that if they choose to employees and their families can continue to use their prior employer’s group health insurance plan for up to 18 months in most cases. The health insurance plan under COBRA health insurance will stay exactly the same but the major difference will be that the employee must pay the full cost. Normally this is at least double what the employee paid while employed since most companies subsidize health insurance costs.

Who Can Use COBRA Health Insurance?

Under the COBRA health insurance there are three conditions that must be met in order for an employee and/or their family members to qualify for COBRA – qualifying plan, qualifying event, and qualifying beneficiaries. The first condition known as qualifying plan refers to the type of group health insurance plan that the employee had while employed. In most cases the person will qualify for COBRA health if the plan covered at least 20 full time employees or their part time equivalents. The second condition, known as qualifying event, refers to why health insurance is being lost. Most people qualify for COBRA health insurance under this condition if they quit, retired from, or lost their job without serious misconduct. Spouses can also qualify if they are losing their health insurance due to death of the covered employee or divorce from the covered employee. Adult children who are losing their dependent status, normally at 26, can also qualify. The final condition, qualifying beneficiaries, refers to who is eligible to get COBRA health insurance. In most cases anyone who was covered on the plan before can be covered with COBRA.

Are There Less Expensive Alternatives to COBRA Health Insurance?

There very well be more affordable alternatives to COBRA health insurance depending on your health insurance needs. For people who are relatively healthy, private insurance plans are usually much more affordable than COBRA. In fact on average people save about 65%, or over $600 monthly, by choosing a private individual or family plan. The best way to learn about private health insurance options is to get a free quote and explore. It takes about 1 minute to get a quote and start learning what is out there.