Understanding COBRA continuation coverage
COBRA lets you keep your employer health plan after leaving a job — for a price. Who qualifies, what it costs, and the alternatives to consider.
COBRA is a federal law that lets you keep your employer's group health plan for up to 18 months (sometimes 36) after you would otherwise lose coverage — for example, after a layoff, voluntary resignation, or reduction in hours. The catch: you pay the full premium plus a 2% administrative fee, which is often eye-wateringly expensive.
Who qualifies
- Employees and their dependents enrolled in an employer health plan with 20+ employees on most business days.
- Triggered by: termination (other than for gross misconduct), reduction in hours, divorce, death of the employee, or a dependent aging out at 26.
- Smaller employers may offer mini-COBRA under state law — coverage duration and rules vary.
What it actually costs
When you were employed, your employer paid 70–80% of the premium. Under COBRA, you pay 100% plus a 2% admin fee. For a family plan, expect $1,800–$2,800 per month. Use this number to compare against marketplace plans before deciding.
How long it lasts
- 18 months — Standard period after termination or reduction in hours.
- 29 months — If you become disabled within 60 days of the COBRA start date.
- 36 months — For dependents after the death of the employee, divorce, or aging out.
How to enroll
- Watch for your election notice
Your employer or COBRA administrator must mail an election notice within 44 days of your qualifying event. It explains your options, premiums, and deadlines.
- Decide within 60 days
You have 60 days from the later of the notice date or coverage end to elect COBRA. The clock is firm.
- Compare alternatives before electing
Marketplace coverage with ACA subsidies, a spouse's employer plan, or Medicaid (if income-eligible) are often cheaper. Loss of coverage is itself a QLE for special enrollment.
- Pay retroactively if needed
You can elect COBRA up to 60 days after losing coverage and pay retroactive premiums — useful if you had a medical event during the gap. The coverage is treated as continuous.
What to do in BenAsk
If you still have leftover COBRA, open Plans and choose Change coverage. Pick work situation changed, then Unemployed, then leftover COBRA, and enter the COBRA end date. BenAsk adds a calendar deadline and Inbox reminders as that date approaches so you can record a new employer, Medicare, or marketplace coverage.
FAQ
- Can I keep dental and vision through COBRA?
Yes — COBRA applies to any group health benefit you had, including dental, vision, and Healthcare FSAs. You can elect them individually.
- What happens to my Healthcare FSA under COBRA?
Limited COBRA rights apply: you can typically continue contributing post-tax through the end of the plan year if you have a positive balance. Rarely worth the cost.
- Can my new employer reject me because I had a gap?
No. The ACA eliminated pre-existing condition exclusions, so a gap in coverage doesn't affect your eligibility or what's covered at your next employer.