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COBRA Coverage and Disability

Losing your job because of a permanent disability does not necessarily mean you lose coverage under your former employer's group health plan. You may have the right to elect COBRA healthcare continuation coverage under the plan.

Learn more about COBRA here:

COBRA Eligibility and Coverage
Federal law requires employers with 20 or more employees to provide COBRA. To be eligible, you must also have been enrolled in your employer's health plan when you worked and the health plan must continue to be in effect for active employees.

Under COBRA, you have the option to keep your employer's group health plan coverage for a limited period of time after your employment ends. If you are eligible for COBRA, you should get a detailed notice with coverage and application details from your former employer's benefits administrator or the group health plan.

COBRA generally allows you and your dependents to keep the group health plan coverage for 18 months after your employment ends. There is an additional 11 month extension available when a qualified beneficiary is determined by the Social Security Administration (SSA) to be disabled.

Extra coverage for those with disabilities. If one of the qualified beneficiaries in a family is disabled and meets eligibility requirements, all of the qualified beneficiaries in that family are entitled to an 11-month extension of the general 18 month COBRA coverage period. This would then provide a total COBRA coverage period of 29 months.

This 11 month extension is available if:

  • a qualified beneficiary is determined by the SSA to be disabled at some point before the 60th day of COBRA coverage, and
  • the qualified beneficiary (or another person on his or her behalf) notifies the health plan administrator of the SSA determination.

Choosing Between COBRA and Private Coverage
Trying to decide whether COBRA coverage is best for you is not easy. Like most things, the choice comes down to weighing the costs versus the benefits of having the coverage.

Pros Cons
  • COBRA coverage allows you to continue your previous health insurance and cover your increasing medical needs.
  • Pre-existing conditions covered while you were with your employer will be covered under COBRA because you will be continuing your coverage vs. going to a new health insurance plan.
  • Though COBRA is expensive, it is still usually less expensive than getting comparable individual health coverage from a non-employer source.
  • Because certain ARRA unemployment benefits have been extended, you may pay less for COBRA if you were involuntarily terminated before March 31, 2010.
 
  • COBRA coverage is expensive:
     
    • For the first 18 months, the premium for continuing health insurance coverage costs 102% of the cost to the plan for those still employed. This will include any cost you paid as an employee plus any portion your employer had paid as an employee benefit, plus a 2% administrative fee.
    • For those receiving the 11 month disability extension, the premium for these additional months may go up to 150% of the plan's total cost of coverage.
     
 

Unfortunately, there is no one-size-fits-all answer to whether getting COBRA coverage or if keeping it is best for you. The best way to decide is to compare the monthly costs of using a private health insurance plan compared to COBRA coverage.

When You Need Help Covering Healthcare Costs
If you don't have the money to pay for premiums, consider exploring some low-cost healthcare options to help with some of the essential costs. These include drug company and state pharmaceutical assistance programs. There also are various government programs that provide health insurance coverage to people who can't afford to buy it themselves.

  • Medicaid
  • Veteran's assistance benefits
  • State and local health services

If you are or will soon be eligible for Medicare coverage, read our section on Medicare.