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Health Coverage Under COBRA and State Continuation

Other Health & Benefit Issues

This article explains how COBRA insurance and/or state continuation allows employees to keep their health insurance for a period of time after they leave their job.

Here, learn about COBRA, a federal law that lets employees continue their health coverage for a period of time after they leave their job. This article also explains how to extend your coverage after COBRA or continue your coverage if you aren’t eligible for COBRA.  

The information in this article was written by the Texas Department of Insurance. It has been lightly edited for style.  

Revised by TexasLawHelp.org on February 21, 2023.

What is the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that lets employees continue their health coverage for a period of time after they leave their job. It applies to coverage from employers with 20 or more employees. It doesn’t apply to plans offered by the federal government or some church-related groups.

Who is eligible for COBRA coverage?

You can get COBRA coverage if: 

  • You leave your job for any reason other than gross misconduct. Gross misconduct usually means doing something harmful to others, reckless, or illegal. 

  • You lose your coverage at work because you switch from working full-time to part-time. 

If your family was on your health plan, you can continue their coverage under COBRA. Your spouse and children also can continue their coverage if you go on Medicare, you and your spouse divorce, or you die. They must have been on your plan for one year or be younger than 1 year old. Their coverage will end if they get other coverage, don’t pay the premiums, or your employer stops offering health insurance. 

How do I sign up for COBRA?

You have 60 days after you leave your job to decide whether you want COBRA. You must tell your employer in writing that you want it. If you continue your coverage under COBRA, you must pay the premiums yourself. Your employer doesn’t have to pay any of your premiums. 

Is COBRA coverage the same plan I had with my employer?

Your COBRA coverage will be the same as the coverage you had with your employer's plan. If you continue HMO coverage and move out of the service area, the HMO will pay only for emergency care. COBRA coverage will end if your employer stops offering health insurance. 

What is state continuation?

Texas law requires some group plans to continue your coverage for six months after COBRA coverage ends. Your plan must be subject to Texas insurance laws. State continuation doesn’t apply to self-funded plans since the state doesn’t regulate them. 

State continuation lets you keep your coverage even if you can’t get COBRA. If you aren’t eligible for COBRA, you can continue your coverage with state continuation for nine months after your job ends.  

How do I get state continuation?

To get state continuation, you must have had coverage for the three months before your job ended. If you continue your plan, you will have to pay the premium. Ask your former employer about these options. 

You usually can’t get state continuation if you were fired.   

Your employer must tell you about continuation of coverage within 30 days from the date your job ended. 

What if I have a disability?

If you have a disability, you can get coverage for an additional 11 months after COBRA coverage ends. The Social Security Administration determines disability. 

More information

To learn more, visit the Health care coverage guide, provided by the Texas Department of Insurance, COBRA Continuation Coverage, provided by Benefits.gov, or FAQs on COBRA Continuation Health Coverage for Workers, provided by the U.S. Department of Labor

You can also call the Employee Benefits Security Administration at 866-444-3272. 

If you need to find a new health plan, visit Need health insurance? How to find a new health plan now

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