Is Accepting COBRA Coverage Mandatory?

If you rely on employer-based health insurance and you lose your job, you may wonder what happens if you need medical care before you are able to get new coverage. Fortunately, a law passed in 1986 gives many workers and their families the right to retain their health insurance even if they quit or lose their jobs.

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You are not required to accept COBRA. This option is not for everyone, but it can benefit those in certain situations and help avoid gaps in coverage.

Do I Have To Accept Cobra Insurance?

What Is COBRA?

COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act. Prior to COBRA, if workers lost their jobs, they immediately lost their health insurance. This law gave qualified workers the option of keeping their group health insurance plan if they lose or quit their job or lose their full-time job status.

How Much Does COBRA Cost?

The biggest drawback to COBRA is its cost. With this option, you pay both your portion of the monthly premiums as well as what the employer paid. Additionally, there may be an administrative fee. The high cost of COBRA can be burdensome for anyone, but it can put coverage out of reach financially for someone who has recently become unemployed. Before you begin to pay your first Cobra payment, you absolutely should speak with your broker. You may be eligible for a Government “Subsidy” to help you pay your health insurance. This would not help pay your Cobra, but it would help you pay for a “Qualified Health Plan” that covers pre-existing conditions.

When Is COBRA the Best Option?

COBRA is costly, but it can be a bargain compared to being uninsured. If you or one of your dependents has ongoing health needs such as an illness or disability, paying for COBRA may not only save you from high stress situations like having to change medical providers, but in many cases, you may have a PPO plan. In Nevada, we have very few PPO plans available. It’s very important to speak with a qualified, knowledgeable health insurance broker. You owe it to yourself to get some insight on what your options and costs could be. Don’t rush into accepting Cobra. Call your broker and ask them what your options are. In some cases, your best option may be to find private health insurance without a subsidy but that is less expensive than Cobra.

What If I Change My Mind?

If you initially decide to accept COBRA but later change your mind, you may have options. But honestly, the options will be narrowed. It’s best to call your broker BEFORE you pay for Cobra.  Find out what your options are. 

If you want to change coverage during the Open Enrollment Period, which runs from November 1 through January 15 in Nevada, you are always free to make changes then.  If it is outside the enrollment period and you want to end COBRA early, you do not qualify for a special enrollment period.

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