COBRA gets its name from the Consolidated Omnibus Budget Reconciliation Act. It is a federal law that may let you keep group health coverage for a limited time after certain life or job events.
What it means
The coverage may look much like the work plan you already had. The big change is often the price: you may pay the part that the employer paid before, plus an allowed fee.
COBRA can provide a bridge, but it is not the only choice. A spouse's plan or an ACA Marketplace plan may be available too.
A simple example
Your work health plan costs $1,200 a month, but only $300 came out of your paycheck because the employer paid the rest. After the job ends, COBRA may let you keep similar coverage. The surprise is that you may now pay close to the full $1,200 plus an allowed fee.
Keeping the same doctors and benefits may make COBRA worth the price for a while, especially during ongoing treatment. But a spouse's plan or an Affordable Care Act Marketplace plan could cost less. Compare the full monthly cost, deductibles, doctors, drugs, and deadlines before deciding. COBRA is a temporary bridge, not automatically the best or cheapest choice.
What people often miss
Election and payment deadlines matter. Coverage is temporary.
Choosing to end COBRA early may not always create a special Marketplace enrollment window. Check the timing before canceling.
Three questions worth asking
- What is the full monthly cost?
- How long can coverage last?
- How does this compare with a spouse's plan and the Marketplace?
Checked against primary sources
This explanation was checked against the sources below. Rules and limits can change, so check the source before making a decision.
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