Just in case someone does not know what COBRA stands for, it is the Consolidated Omnibus Budget Reconciliation Act, enacted by congress to cover an employees health benefits for duration of at least 18 months after they leave their employer for a number of reasons. COBRA health benefits are available to past employees who were covered under a group health insurance plan through their employer.
COBRA health insurance contains certain provisions for employees, retired persons, their spouses and their dependent children to have the right for continued health benefits on a temporary basis. The premiums must be paid by the employee and these premiums are generally expensive to maintain, sometimes being double or triple cost of what their health insurance premiums were when the employee was covered with a group health insurance. Where the employer paid for a portion of the employees monthly premiums, the employee would be responsible for 100% of the cost of the monthly premium. Sometimes the employer will add a 2% surcharge as a fee. COBRA is expensive because the employer is not paying the employees part. If the employee is in good health and is not in a high medical risk category, they may be able to obtain a lower cost COBRA premium.
When an employee leaves their company for whatever reason, all benefits are cancelled. Life insurance is not covered. What the COBRA health insurance plan does cover is inpatient and outpatient hospital care, doctor bills, prescription drugs, dental and vision care and any necessary surgical interventions and major medical.
The length of time that COBRA will cover an employee depends on how and why they left their job. If the employee was terminated, quit their position or had a reduction in their work hours then they would normally be qualified for COBRA benefits for 18 months. If the employee left their employment due to death, a divorce or legal separation, or loss of a child they would be entitled to 36 months of COBRA coverage.
If the employee wants to continue health care benefits through COBRA their employer has a 45 day window to get all information to them. As mentioned before, as soon as an employee leaves their duties their benefits are also terminated. If the employee needs medical treatment and are seeking COBRA benefits before this actually takes effect, all out of pocket monies paid by the employee will be reimbursed.