Health Matters in the 2008 Election

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Focus on an Issue: Health Insurance If you Change or Lose Your Job

By Todd Zwillich
Researched by Michele Foust
WebMD Special Report Reviewed by Louise Chang, MD

The concept of staying with one job until retirement is for the most part a thing of the past. In a modern economy, people change jobs and lose jobs perhaps more often than they'd like. If you find yourself between jobs, out of a job, or your company is trimming your hours, WebMD offers some answers to some important questions.

I just lost my job and health insurance. How can I get insurance coverage?

If you had group coverage through your employer, and your workplace employed 20 or more employees, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to keep on buying into group coverage even after you lose your job or your benefits. That coverage could get a lot more expensive, because you will have to pay the entire premium yourself instead of sharing the cost with your employer. But COBRA does generally guarantee you the right to keep purchasing coverage.
My hours have been cut and I am losing my insurance. Is help available?

If you lose benefits because of cut hours, COBRA helps you in the same way as if you lose your benefits because of lost employment.
How does COBRA work if I lose my job?

Your employer must notify the health plan within a month if you lose your job or change jobs such that you lose your health benefits. After that, the plan has two weeks to send you an election notice asking if you or your spouse or dependents wish to continue group coverage under COBRA. You then have at least 60 days to elect to continue coverage.
How much will I pay for COBRA?

Generally you will pay the entire cost of your premium for your coverage, plus a maximum of 2% more in administrative costs. This can be quite a bit more expensive than your costs under employer coverage, since employers typically pay around 70% of premiums. For example, consider that you paid $3,000 per year in premiums and your employer paid $7,000 to insure you and three dependents. Under COBRA continuations coverage for all four of you, you would pay the full $10,000 in yearly premiums, plus another $200 in administrative costs.
How long am I entitled to COBRA benefits?

Generally COBRA benefits last 18 months, though that can be longer for certain qualifying events or multiple qualifying events. For example, job loss can qualify an individual for COBRA, and so can divorce. If both events happen, you may qualify for 36 months of group coverage under COBRA.
How soon must I apply for COBRA? How do I do that?

See answer above on COBRA election period.
Can my child use COBRA when he/she is too old to be continued on my health insurance?

Yes. Loss of dependent child status counts as a "qualifying event" under COBRA. That means that your child can still buy your group health insurance if he or she "ages out" of dependent status for your coverage.
When COBRA benefits cease, must insurance companies continue to offer coverage?

No. COBRA coverage is generally only good for 18 to 36 months, depending on the "qualifying events," OR as long as the employer continues offering group coverage to employees. If the employer stops offering group health coverage to employees, you can lose your COBRA access to group coverage.
Can I continue to be covered by health insurance through my former spouse's policy under COBRA?

Yes. Divorce is another "qualifying event" under COBRA. That means that you can elect to continue buying the coverage you had from your spouse's employer after divorce under COBRA.

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Health Matters in the 2008 Election

The content contained in WebMD's "Health Matters in the 2008 Election" section is for informational purposes only. WebMD does not endorse any specific political party, candidate, committee, idea or belief.

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