Health Coverage Under COBRA and State Continuation

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.

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. 

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. 

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. 

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.  

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. 

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

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.