Many who hear the term COBRA automatically assume job loss is part of the story. However, there are several reasons apart from job loss that make an individual eligible for COBRA coverage.
There are two categories of events that qualify an individual to be eligible for COBRA. The first is an employee qualifying event. The second is a dependent qualifying event.
Let’s take a look at three examples of each and how COBRA coverage plays out.
Eligible for COBRA through an employee qualifying event
An employee qualifying event is an event which causes an employee to lose active coverage and makes them eligible for COBRA. (Active coverage refers to medical, dental and vision benefits. It does not include life insurance, AD&D and other benefits).
Active coverage can be lost for several reasons. Three of the most common are:
- a reduction in hours (going from full-time to part-time)
- an employer’s obligation to maintain health benefits under FMLA ceases
- retirement (learn more in our Life Hacks blog)
In all of these scenarios, the employee who lost full-time coverage is now eligible for 18 months* of COBRA coverage.
Eligible for COBRA through a dependent qualifying event
What is a dependent qualifying event?
A dependent qualifying event that results in an employee’s dependents losing active coverage, making them eligible for COBRA. In certain cases, the employee may not experience a loss of active coverage.
Some of the most common dependent qualifying events are:
- dependent turning 26 and aging out of active coverage (under the Affordable Care Act)
- getting a divorce (spouse who had active coverage through employee loses it)
- employee with active coverage dies
After a dependent qualifying event, dependents are eligible for COBRA for 36 months*.
I’m eligible for COBRA. Now what?
If you are trying to decide if COBRA is the right next step for you, here are a few recommendations:
- Review the Department of Labor’s FAQs on COBRA Continuation Health Coverage
- Talk to friends who have considered COBRA or used COBRA and ask them about their experiences
- Visit our COBRA blog page to find out more about your options
*These reflect the period of time you are entitled to continuation coverage under federal COBRA. You may be eligible for state continuation coverage for an additional period of time, depending on your state.
