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COBRA Insurance


COBRA Eligibility
Dependents can also be covered under COBRA insurance.
Dependents can also be covered under COBRA insurance.
Photographer: Nyul I Agency: Dreamstime.com

COBRA has three sets of criteria which describe who is and isn't eligible for this continuation of coverage. The first is called Plan Coverage, which means that the initial group plan has to be held by a business with 20 or more employees working at least half of the year. This includes both full and part time workers. Fortunately, it isn't just private businesses that fall under COBRA's umbrella; you can also work for a federal or state government agency, non-profit organization or even a religious institution.

The second is known as Qualified Beneficiaries; basically, the individual(s) covered by the employer's health plan the day before the qualifying event. And the third set of criteria describes the Qualifying Event, or the set of circumstances that cause an employee to lose their group health care coverage. This can include: loss of job entirely (voluntary or otherwise), reduction of hours from full to part-time, or eligibility for Medicare. For the employee's dependents, qualifying events include divorce or separation and the death of the covered employee. While it's true that COBRA would be available should you either leave a job on your own, or if you're fired, it's stipulated that termination for "gross misconduct" automatically disqualifies you from COBRA eligibility. Interestingly though, neither COBRA legislation nor the court systems have clearly defined just what "gross misconduct" is exactly.

Should you lose your job because your company goes bankrupt, however, it usually means that the group health insurance plan is lost as well. If there's no plan to continue, COBRA can offer no assistance. In other words, a continuation of benefits through COBRA only applies when you lose your ability to participate in an existing group health plan. If your company chooses to end its group plan on its own, COBRA benefits can no longer apply.