Continuation of Health Coverage (COBRA)

An important benefit many people get from their employer is access to a group health insurance plan. Once employment ends, you may have the right to continue your health insurance on your employer’s plan. The federal law that provides this right is known as “COBRA.” Iowa law also provides continuation rights covering smaller employers, which is often called “mini-COBRA.”

It is not just the worker that can benefit from COBRA. For example, if a worker gets divorced, the worker’s spouse may be able to continue health care coverage under COBRA.

Employers often pay part of the insurance premium for workers. Under COBRA, employers don’t have to pay part of the insurance premium, so coverage is usually more expensive.

Which employers are covered by COBRA?

COBRA typically applies to private employers with at least 20 employees, as well as to state and local government employers. COBRA does not apply to the federal government, churches, or some church-related organizations.

When does COBRA coverage apply?

COBRA coverage applies when a “qualifying event” occurs. To be a qualifying event, the event must cause the beneficiary to lose coverage under the plan. Examples of qualifying events include:

• A covered employee dies.
• A covered employee quits.
• A covered employee is fired (except if the employee is fired for “gross misconduct”) or the employee's hours are cut.
• A covered employee gets divorced or legally separated from their spouse.
• A covered employee becomes entitled to Medicare benefits.
• A covered employee's dependent child no longer qualifies as a dependent child under the health care plan.

Who can continue coverage and for how long?

Who can choose to be continue coverage and for how long varies depending on the qualifying event. The chart below shares some basics.

Qualifying Event	Possible Beneficiaries	Typical Maximum Period of Coverage
Fired (for reasons other than gross misconduct), quit, or had hours reduced	Employee Spouse Dependent Child	18 months
Enrolled in Medicare	Spouse Dependent Child	36 months
Divorce or legal separation	Spouse Dependent Child	36 months
Death of employee	Spouse Dependent Child	36 months
Loss of “dependent child” status under the plan	Dependent Child	36 months

 

Where can I find more information?

Employee Benefits Security Administration:

• For workers:
  • An Employee’s Guide to Health Benefits Under COBRA
  • FAQs on COBRA Continuation Health Coverage for Workers
• For employers:
  • An Employer’s Guide to Group Health Continuation Coverage Under COBRA
  • FAQs on COBRA Continuation Health Coverage for Employers and Advisors

U.S. Department of Labor: 

• Continuation of Health Coverage (COBRA)
• elaws Health Benefits Advisor
  • While this Advisor covers health benefits beyond COBRA, it also includes information on COBRA.

Iowa SHIIP, Continuation of Employer Group Health Insurance