In today's economy, where the unemployment rate in California has gone up from 7.4% to 9.3% in just 6 months (July to December 2008) and the number of mass layoff events has increased by over 80% in that same time, knowing one's rights to extended healthcare coverage is increasingly important. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 (PDF) is the federal law that gives certain employees the right to continue their group health insurance when it would otherwise end. This continued care is particularly important for people not yet eligible for Medicare, and those with Medicare who require the extra comprehensive coverage they may receive through their employer plan. This article reviews some of the basics of how COBRA works, who qualifies for it, new help available with COBRA premiums from the signed economic stimulus bill and additional resources to learn more.

Which employers must offer COBRA and what are the benefits?

Federal COBRA requires employers that have at least 20 employees to offer continued group health coverage to qualified employees and family members. Under California state law, CalCOBRA requires employers with 2 to 19 employees to offer continued coverage. Employers include both private employers and public employers (local and state government), but do not include churches or the federal government.

Who qualifies for COBRA?

A covered employee and/or family member qualifies for COBRA when they experience certain life changes, called 'qualifying events,' that trigger the right to continued coverage:

• Voluntary or involuntary termination of employment for reasons other than gross misconduct
• Reduction in hours of employment
• Entitlement to Medicare for covered employee
• Divorce of legal separation of covered employee
• Death of the covered employee
• Loss of "dependent child" status under the plan rules

An employer's plan administrator must notify the employee and the covered family member of their right to continued coverage within 44 days of the event, except in the case of legal separation or divorce. In those cases, the individual must first notify the plan administrator of the separation or divorce, and then the administrator has 14 days to notify them of their COBRA rights. A person then has 60 days after receiving the COBRA notice to let the administrator know if they want COBRA coverage or not.

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