Description
COBRA Job Loss & Health Coverage Poster
Help employees understand their health coverage options after job loss or a reduction in work hours with the COBRA Job Loss & Health Coverage Poster. This workplace benefits poster provides employees with a convenient overview of COBRA continuation coverage and other health insurance considerations when employment changes.
COBRA can allow eligible employees, spouses, and dependent children to temporarily continue group health coverage that might otherwise end because of certain qualifying events. Understanding COBRA rights, election deadlines, coverage periods, and potential costs can help employees make informed decisions about health coverage after a job loss.
What Is COBRA Continuation Coverage?
COBRA refers to federal continuation coverage requirements established by the Consolidated Omnibus Budget Reconciliation Act. COBRA gives certain employees and family members the right to temporarily continue employer-sponsored group health coverage after specific events that would otherwise cause them to lose coverage.
COBRA continuation coverage generally provides the same health benefits available under the group health plan to similarly situated active employees and their families.
Who Is Generally Covered by Federal COBRA?
Federal COBRA generally applies to group health plans sponsored by private-sector employers and state or local governments that employed at least 20 employees on more than 50 percent of typical business days during the previous calendar year.
Different continuation-coverage requirements may apply to smaller employers under state insurance laws, sometimes referred to as state continuation coverage or "mini-COBRA" laws.
Is Job Loss a COBRA Qualifying Event?
Yes. An employee's termination of employment can be a COBRA qualifying event when it causes the employee or another qualified beneficiary to lose group health coverage.
COBRA generally applies to both voluntary and involuntary termination of employment, except when employment is terminated because of gross misconduct.
A reduction in an employee's work hours that results in loss of group health coverage can also be a qualifying event.
Who Can Elect COBRA After a Job Loss?
Depending on who was covered by the group health plan immediately before the qualifying event, qualified beneficiaries may include:
- The covered employee
- The employee's spouse
- Dependent children covered by the plan
Each qualified beneficiary generally has an independent right to elect COBRA continuation coverage. For example, a spouse or dependent may elect COBRA even if the former employee chooses another health coverage option.
How Long Does COBRA Last After Job Loss?
When the qualifying event is termination of employment for a reason other than gross misconduct or a reduction in work hours, COBRA continuation coverage is generally available for a maximum of 18 months.
Certain circumstances can extend continuation coverage. For example, qualifying beneficiaries may be eligible for additional coverage following a qualifying disability determination or certain second qualifying events.
How Long Do Employees Have to Elect COBRA?
Qualified beneficiaries generally must be provided an election period of at least 60 days. The election period begins on the later of the date the COBRA election notice is provided or the date the qualified beneficiary would otherwise lose coverage because of the qualifying event.
Employees should carefully review their COBRA election notice and plan documents because the notice explains how to elect coverage, applicable deadlines, premium information, and where questions should be directed.
When Does an Employee Receive a COBRA Election Notice?
When an employee's termination or reduction in work hours causes a loss of coverage, the employer generally must notify the group health plan within the applicable COBRA notification period.
After receiving proper notice of a qualifying event, the plan administrator must provide qualified beneficiaries with a COBRA election notice explaining their continuation coverage rights and how to make an election.
How Much Does COBRA Coverage Cost?
Employees should understand that COBRA coverage can cost substantially more than the amount they paid for health insurance while actively employed.
A qualified beneficiary may generally be required to pay the entire cost of COBRA coverage, including the portion previously paid by the employer, plus an administrative charge. Under federal COBRA rules, the required premium can generally be up to 102 percent of the plan's total cost.
Does COBRA Provide the Same Health Coverage?
COBRA continuation coverage generally must be identical to the coverage currently available under the plan to similarly situated active employees and their families who have not experienced a qualifying event.
Qualified beneficiaries must generally receive the same rights and opportunities available to similarly situated participants, including applicable choices during open enrollment.
Can an Employee Join a Spouse's Health Plan After Job Loss?
Employees losing job-based health coverage may have alternatives to COBRA. One option may be special enrollment in a spouse's employer-sponsored group health plan if the employee meets the plan's eligibility and special enrollment requirements.
Employees should compare available health coverage options, premiums, deductibles, provider networks, prescription coverage, and enrollment deadlines before deciding which option best meets their needs.
Other Health Coverage Options After Job Loss
Depending on individual circumstances, health coverage options after losing employer-sponsored insurance may include:
- COBRA continuation coverage
- A spouse's employer-sponsored health plan
- Another employer-sponsored group health plan
- Health Insurance Marketplace coverage
- Medicaid or the Children's Health Insurance Program when eligible
- Other coverage available under applicable federal or state programs
COBRA Coverage and Dependents
COBRA rights are not limited to the former employee. A spouse or dependent child who qualifies for continuation coverage may independently elect COBRA even when the employee does not.
Other qualifying events, such as divorce or legal separation, death of the covered employee, or a child losing dependent status under the plan, can provide spouses or dependents with different COBRA continuation periods and notification requirements.
When Can COBRA Coverage End Early?
COBRA continuation coverage can end before the maximum coverage period in certain circumstances. Examples can include failure to pay required premiums on time, the employer ceasing to maintain a group health plan, or other events permitted under applicable COBRA rules.
Qualified beneficiaries should carefully review their plan documents and COBRA notices to understand premium deadlines and circumstances that may cause continuation coverage to end.
Is a COBRA Job Loss Poster Federally Required?
Federal COBRA law establishes specific notice requirements for covered group health plans, employers, and plan administrators. However, this particular COBRA Job Loss & Health Coverage Poster is intended as a supplemental employee benefits and awareness resource and should not be represented as a substitute for required COBRA notices.
This poster does not replace the COBRA General Notice, COBRA Election Notice, Summary Plan Description, individual benefits communications, or other notices required under applicable federal or state continuation coverage laws.
Keep COBRA and Benefits Information Current
Employee health benefit requirements and plan provisions can change. Employers and employees should rely on current plan documents and official guidance when determining COBRA eligibility, election deadlines, premiums, coverage periods, and other continuation coverage rights.
Employee Benefits and Compliance Resources
Labor Law Compliance Center provides employers with labor law posters, workplace policy posters, employee benefits materials, specialty postings, and compliance resources for businesses throughout the United States. Browse our Workplace Policy Posters for additional employee policy, benefits, and workplace awareness materials.
