Top 5 questions about COBRA benefits

You have 60 days from a “qualifying event” or the date your notice is mailed (whichever is later) to enroll in COBRA. A qualifying life event can be a job loss, divorce or death of your spouse, among others. Your former employer will send you details about how to sign up. They have  30 days from this qualifying event to let the COBRA administrator know of your election.

Keep in mind that if you wait to enroll, you won’t save any money. COBRA is always retroactive to the day after your employer coverage ends. So, you’ll need to pay your premiums for that period too.

Your former plan can charge the full amount paid by both you and your former employer, plus an added 2 percent for administrative costs. According to an Employee’s Guide to Health Benefits Under COBRA, your COBRA premium costs more because employers usually pay part of the costs for their active employees’ coverage. But under COBRA, you’re paying that premium in full.*

While it may seem like a lot of money, COBRA may actually cost you less than what you’ll pay on the open market. That’s because you may still get your former company’s group discount.
 
You can also use a  health savings account (HSA) to pay for your COBRA premiums. They’re considered a qualified medical expense.

COBRA is temporary. It gives you time to find another health plan or covers you until your next employer plan kicks in, like when you start a new job. Federal coverage lasts 18 months but may extend up to 36 months if you have a second “qualifying event.” For instance, a divorce or death of a spouse. 
 
Find out how qualifying life events, like marriage or having a baby, affect your health coverage.

COBRA isn’t your only option if you lose your employer-sponsored plan. You may also qualify for other health benefits. You can:

• Join your spouse’s employer plan. Leaving your job triggers a special enrollment period. This lets you join your spouse’s plan. Even if they aren’t enrolled in their employer’s plan, your job loss lets you both sign up outside the usual open enrollment period. But you must do so within 30 days.
• Enroll in a trade or professional group plan. You may be able to find plans that cost less through national organizations that offer benefits for independent workers. For instance:
  • The National Association for the Self-Employed ($120/year membership fee; NASE.org)
  • The Freelancers Union (free membership; FreeLancersUnion.org)
• Apply for the Children’s Health Insurance Program (CHIP) if you’re a low-to-moderate income family. If you earn too much to sign up for Medicaid, but you can’t afford private coverage, you may be able to get your kids low-cost coverage through CHIP. You can learn more at HealthCare.gov.
  
• Choose a health plan on the government’s individual health insurance marketplace. You don’t need to wait until open enrollment in the fall if you have a qualifying life event, such as leaving a job. You have 60 days to choose a plan on the marketplace, which was established under the Affordable Care Act (ACA). Aetna® offers individual and family plans under the ACA.

If you’re 65 or older, learn about more your health insurance options through Aetna Medicare.

If you don’t find a new job with benefits before your COBRA ends, you’ll need to choose one of the other options. If you need help, talk to your current or former benefits manager. Also, the website for your state’s department of insurance may provide good information.

Bottom line: When you lose coverage, make sure you shop around ahead of time. It will help you avoid any lapse in coverage and find the most affordable options.