Definition
A federal law that gives employees and their dependents the right to temporarily continue group health insurance coverage after a qualifying event such as job loss, reduction in hours, or other life events that would otherwise end their coverage.
UK Context
Best Practices
- Automate COBRA qualifying event tracking and notice generation to ensure timely compliance
- Send election notices within 14 days of being notified of a qualifying event
- Maintain documentation of all COBRA notices sent, including delivery method and dates
- Inform departing employees about both COBRA and Marketplace coverage options during offboarding
Frequently Asked Questions
How long does COBRA coverage last?
The standard COBRA continuation period is 18 months for termination of employment or reduction in hours. It extends to 36 months for other qualifying events such as divorce, death of the covered employee, or a dependent losing eligibility. A disability extension can provide up to 29 months.
How much does COBRA cost?
COBRA participants pay the full premium — both the employer and employee portions — plus a 2% administrative fee. This typically costs several hundred to over a thousand dollars per month depending on the plan, as the employer no longer subsidises the premium.
Is COBRA always the best option for someone leaving a job?
Not necessarily. The ACA Marketplace may offer more affordable coverage, especially for individuals eligible for premium tax credits. However, COBRA allows the employee to keep their exact same plan, doctors, and prescription coverage, which may be important for continuity of care.