COBRA (Consolidated Omnibus Budget Reconciliation Act)

What Is Cobra Health Insurance?

COBRA, short for Consolidated Omnibus Budget Reconciliation Act, provides the opportunity for employees and their dependents to stay on their employer group insurance coverage after the loss of employment.

Being let go from your job can be overwhelming and unnerving. Not only do you now have a loss of income, but you also have a loss of health insurance or need to find health insurance elsewhere.

Congress understood this dilemma in 1986 and set forth the COBRA provisions. This new act amended the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act in order to expand benefits for those who had lost insurance coverage through their employer.

Who Is Eligible for COBRA?

Employers with 20 or more employees are generally mandated to provide COBRA benefits and need to notify their employees of its availability. Qualifying events for employees for COBRA coverage include:

  • Voluntary or involuntary loss of a job as long as it was not for gross misconduct
  • Reduced hours on the job

Spouses are also covered in the event that they divorce or legally separate from the covered employee, the covered employee becomes eligible for Medicare, or the covered employee dies. If a dependent child loses their dependent status under the plan rules, they are also eligible for COBRA coverage.

COBRA Basics

Under COBRA, you pay the one hundred percent of the premiums, or monthly cost for your health insurance. This includes your normal premium payment plus the portion that your own employer used to pay as well as a small administration fee. For some people, the total COBRA payments can be two to three times that of the monthly premiums they were paying during their employment.  Find out if it is more cost effective to switch plans by entering your zip code here, or give one of our agents a call 858-771-4087!

However, you and your dependents get to keep the same insurance you had during the period of employment. All of your health insurance benefits will remain the same and be through the same health insurance company during the time that you are on COBRA.

Pros and Cons of COBRA 

As with all types of health insurance, there are pros and cons to electing COBRA coverage. It is important to examine them in light of your current situation before deciding whether or not you will elect COBRA.


  • You do not have to worry about finding other health insurance coverage after the loss of a job.
  • You have the convenience of keeping the coverage and health care providers that you are already familiar with.
  • COBRA provides continuity and stability as you transition from one job to the next.


  • It must be elected; if you do not tell your former employer you want it, you will lose it. 
  • Premiums can be very expensive.
  • In most cases, COBRA only covers you for 18 months.