Can You Get COBRA Health Insurance if You Quit Your Job?

Suppose you received health care benefits via your prior employer and are now out of work due to a qualifying event, such as quitting your job. In that case, you are eligible for COBRA continuous coverage benefits.

If you lose your job, resign, or cut your hours, you have several alternatives for receiving health insurance, including COBRA. If you are unsure if you are eligible for health insurance coverage, you can learn more about COBRA and how to extend the coverage associated with this health insurance program. 

How Does It Work?

So, you have been laid off from your job or otherwise resigned. If you become eligible for a COBRA plan, such as by losing your job due to a qualifying event, the employer must notify the health insurance carrier within 30 days of your final day.

The health insurance company will then contact you with instructions on enrolling in COBRA. Cost estimates will be included in the instructions mailed to you following your last day of employment.

Unfortunately, COBRA continuation coverage for an unemployed individual is more expensive than the premiums active workers pay for group health care. This is because employers often pay a portion of the covered expenses for active employees. As a result of no longer working for your previous employer, employer payments will no longer apply to you.

Furthermore, COBRA allows you to continue your former employer’s health insurance coverage. So you continue to have the same coverage, even though your old employer no longer pays for it.

Experts note that under COBRA, you may typically maintain the same healthcare providers but expect to pay more for coverage. However, you may be required to pay the whole premium — up to 102% of the plan’s cost.

How to Get COBRA Insurance if You Get Laid Off?

First of all, before applying for the continuation of your COBRA plan, you need to qualify for it. Here are the typical steps everyone trying to apply for COBRA should take:

1. The Organization Should Have COBRA in Place

Most state and local government employers, as well as some private sector companies, offer COBRA continuation coverage. In other cases, states without COBRA in place offer coverage plans that are similar to it.

If you quit your position or had your hours cut for causes other than “gross misconduct,” you can preserve your health insurance for up to 18 months, as long as you continue to pay your premiums.

2. Wait for a Letter From the Insurer

After you leave your job or get fired, your employer is required to notify the insurance company that is responsible for your health plan within 30 days.

After that, the company has another 14 days to send you a notice containing the information about your insurance coverage.

This notice will contain all the required information on where to send your paperwork and the price of the COBRA plan extension.

3. Select Your Coverage

When you receive the notice, you will have up to 60 days to select a health coverage plan that suits your needs. Use this time to choose the required coverage plan.

4. Make the First Payment

When you select the health insurance plan you require, you will have up to 45 days to pay the fees for the premium. Once this payment comes through, you will be covered by the COBRA health insurance.

Fortunately, you can keep your COBRA insurance plan for up to 36 months. In the worst-case scenario, if you keep paying for your coverage, you will keep COBRA for at least 18 months from the date you were laid off.