COBRA covers the same group health benefits you had through your employer before you lost coverage. That includes medical, dental, vision, prescription drug plans, and any other health benefits your employer’s group plan provided. The coverage is identical to what similarly situated employees still receive, so nothing changes about your plan’s network, copays, or deductibles. What does change is the cost: you pay the full premium yourself, plus a small administrative fee.
Which Benefits Continue Under COBRA
COBRA continuation applies to group health plans maintained by your employer. If your employer offered medical insurance, dental coverage, vision coverage, or prescription drug benefits as part of the group plan, all of those are eligible for COBRA continuation. You receive the exact same plan you had while employed, with the same providers, formularies, and coverage levels.
COBRA does not cover benefits outside the group health plan. Life insurance, disability insurance, and other non-health benefits your employer may have provided are not part of COBRA. These end when your employment ends, regardless of your COBRA election.
Who Qualifies for COBRA
COBRA applies to private-sector employers with 20 or more employees who offer group health plans. Federal, state, and local government plans have similar rules. If your employer is smaller than 20 employees, federal COBRA doesn’t apply, though many states have “mini-COBRA” laws covering smaller employers.
To qualify, you need a “qualifying event,” which is a life change that would otherwise cause you to lose your group health coverage. The qualifying events differ depending on whether you’re the employee, a spouse, or a dependent child.
For employees, two events trigger COBRA eligibility:
- Job loss for any reason other than gross misconduct (including voluntary resignation, layoffs, and firing)
- Reduction in work hours that causes you to lose health plan eligibility
Spouses and dependent children qualify under a broader set of events:
- The employee’s job loss or hour reduction
- The employee becoming eligible for Medicare
- Divorce or legal separation from the covered employee
- Death of the covered employee
Dependent children also qualify if they age out or otherwise lose dependent status under the plan’s rules.
How Long COBRA Coverage Lasts
The standard COBRA coverage period is 18 months, which applies when the qualifying event is job loss or a reduction in hours. From there, the timeline can extend depending on circumstances.
If any qualified beneficiary is determined to be disabled under Social Security within the first 60 days of COBRA coverage, the entire family’s coverage can extend to 29 months. That disability extension adds 11 months beyond the standard 18.
Spouses and dependent children can receive up to 36 months of coverage in certain situations. If a second qualifying event occurs while COBRA is already active (for example, the former employee dies or a divorce happens during the initial 18-month period), coverage extends to a total of 36 months. The same 36-month maximum applies when the employee became entitled to Medicare before the job loss or hour reduction that triggered COBRA.
What COBRA Costs
You can be charged up to 102% of the total plan cost. That includes both what you were paying as an employee and what your employer was contributing on your behalf, plus a 2% administrative fee. This is often a significant jump. Many employees only see their portion of the premium on their paychecks without realizing their employer covers 70% to 80% of the total cost. Under COBRA, you’re responsible for the full amount.
For those on the 11-month disability extension, the premium can increase to 150% of the plan’s total cost during those additional months. That higher rate only applies to months 19 through 29.
Election and Payment Deadlines
After a qualifying event, your former employer’s plan must send you an election notice. You then have at least 60 days to decide whether to enroll, starting from either the date you receive the notice or the date you would have lost coverage, whichever is later. You don’t need to decide immediately, and this window gives you time to weigh COBRA against marketplace plans or a spouse’s employer coverage.
Once you elect COBRA, you have at least 45 days to make your first premium payment. Coverage is retroactive to the date it would have otherwise ended, so there’s no gap. If you visit a doctor or fill a prescription during that election window and later decide to enroll, those claims will be covered once your payment goes through. If you decide not to elect, you owe nothing.
How COBRA Compares to Other Options
Losing employer coverage qualifies you for a special enrollment period on the Health Insurance Marketplace, giving you 60 days to shop for a new plan. Marketplace plans may be less expensive than COBRA, especially if your income qualifies you for premium subsidies. COBRA premiums are fixed at the full plan cost with no income-based discounts.
The main advantage of COBRA is continuity. You keep the same doctors, the same network, and the same plan design. If you’re mid-treatment, have a provider you trust, or want to avoid any disruption, COBRA lets you maintain your coverage exactly as it was. For short gaps between jobs, the 18-month window is often more than enough time to transition to a new employer’s plan.
If your spouse has employer-sponsored coverage, joining that plan during a special enrollment period is typically the most affordable route. COBRA works best as a bridge when no other group coverage is available and keeping your current plan matters more than minimizing cost.