Washington State Office of the Insurance Commissioner

Your Rights Under COBRA

The federal government created the Consolidated Omnibus Budget Reconciliation Act (COBRA) in 1985 to guarantee that working Americans who lost their jobs did not lose their health insurance.  Prior to 1985, terminated employees or employees whose hours were cut back often found themselves without health insurance. COBRA provides some measure of protection for employees, retirees, spouses, and dependent children. Under COBRA:

  • Employees who lose their employer-provided health insurance and their eligible dependents may continue their coverage by paying the entire premium plus a 2% administrative fee.
  • COBRA usually guarantees extension of health insurance for up to 18 months, although spouses and children may qualify for extensions of up to 36 month when they lose their dependent status.
  • Employers must notify employees of their COBRA rights. Once notified of their eligibility, employees have 60 days to accept coverage.

Cobra doesn't apply to everyone

Coverage is expensive

New COBRA subsidy offers help for laid-off workers

  • Who is eligible for the new COBRA subsidity
  • How much is the subsidy and how do people enroll?
  • How long does the subsidy last?
  • What if I lost my job, but didn't select COBRA before?
  • Can I still apply for the subsidy?
  • Where can I learn more about COBRA and the subsidy?

Where to go for more help?



Cobra doesnt' apply to everyone

The law only applies to employers who had 20 or more workers in the previous year, although seasonal-type operations may or may not qualify.

State and local governments fall under COBRA, but federal plans and certain religious organizations do not. (Federal employees do have some similar rights under another law and should ask their human resource department for more information.) Also, COBRA generally does not apply to employees who are terminated for “gross misconduct.”

Coverage is expensive

Health insurance through COBRA is often expensive. Employees who select COBRA must pay the entire premium including the portion previously paid by their employer, plus a 2% administrative fee.

 

New COBRA subsidy offers help for laid-off workers

The American Recovery and Reinvestment Act of 2009 (also referred to as the Stimulus Plan) provides temporary subsidies to some workers so they can keep their former employer’s health insurance plan.  

  • Who's eligible for the new COBRA subsidy? Only people who were laid-off from their job between Sept. 1, 2008-Dec. 31, 2009 and who worked for an employer with 20 or more employees qualify for the temporary subsidy. The individual's family also qualifies if they were covered by the employer's plan.

    Individuals earning more than $125,000 per year and married couples with annual incomes over $290,000 are not eligible for the subsidy.

    Also, If an employer goes out of business or stops offering health insurance its employees are no longer eligible for COBRA or the subsidy.
  • How much is the subsidy and how do people enroll? People who qualify for the subsidy pay 35% of the total premium. The U.S. Government will reimburse the employer or insurer for the remaining 65% of the premium. Employers must notify former employees if they qualify for the COBRA subsidy.
  • How long does the subsidy last? The subsidy is good for 9 months.
  • What if I lost my job, but didn't select COBRA before? Can I still apply for the subsidy? Yes, employers must notify former employees who qualify for the subsidy and employees have 60 days to decide.
  • Where can I learn more about COBRA and the subsidy? Visit the U.S. Dept. of Labor's Employee Benefits Security Administration page FAQs For Employees About COBRA Continuation Health Coverage or call 1-866-444-3272.

If you'd like to speak to someone locally, contact:

U.S. Labor Department, Employee Benefits Security Administration

Seattle District Office

1111 Third Avenue, Suite 860

Seattle, WA 98101-3212

Duane Peterson - Supervisor

Phone:  206-553-4246

Toll Free:  1-866-444-3272

Fax:  206-553-0913

Public-sector employees with questions about COBRA should contact The Center for Medicare and Medicaid Services (CMS):


Centers for Medicare and Medicaid Services

7500 Security Boulevard

Mail Stop S3-16-16

Baltimore, MD 21244-1850

Toll Free:  1-866-400-6689
Email: continuationcoverage@maximus.com



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