What is
COBRA?
COBRA is an acronym that stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. This federal law allows employees the right to continue participating in their group health insurance coverage after leaving their job. COBRA gives participants, who would otherwise lose coverage as a result of certain events, the opportunity to temporarily continue their group health care coverage under their employer’s plan on a self pay basis.
COBRA continuation coverage can help you temporarily maintain your employer-sponsored group health coverage after certain events that would otherwise cause you to lose it. If your COBRA benefits are administered by Progressive Benefit Solutions (PBS), we help manage notices, elections, premium payments, and other administrative steps throughout the COBRA process.
This guide explains COBRA eligibility, qualifying events, enrollment deadlines, costs, payments, and what to expect as a COBRA participant.
ALL ABOUT COBRA
1 Employer sends eligibility file to PBS
2 PBS sends COBRA Specific Rights Notice and election information to qualified beneficiaries (QBs)
3 QBs elect coverage and make payments for each month they’d like to continue coverage
4 PBS communicates eligibility and coverage changes to insurance carriers
Understanding COBRA Coverage
COBRA, the Consolidated Omnibus Budget Reconciliation Act, gives certain employees and their families the right to temporarily continue group health coverage after a qualifying event that would otherwise result in the loss of coverage. COBRA is not a separate insurance plan; eligible participants generally continue their existing group health coverage for a limited period.
Qualified beneficiaries may include covered employees, spouses, and dependent children, depending on the plan and qualifying event.
What Are COBRA Qualifying Events?
Common COBRA qualifying events include:
- Termination of employment for reasons other than gross misconduct
- Reduction in work hours
- Divorce or legal separation
- Death of the covered employee
- Loss of dependent-child status under the plan
- Certain circumstances involving Medicare entitlement
Your qualifying event can affect who is eligible for COBRA and how long coverage may continue.
How PBS Supports COBRA Participants
If PBS administers COBRA benefits for your employer or former employer, we help manage important steps throughout your COBRA experience. PBS may assist with:
- Providing required COBRA notices and election information
- Processing COBRA elections
- Billing and recording premium payments
- Communicating applicable plan and rate changes
- Coordinating enrollment changes with insurance carriers
- Providing participant support throughout the COBRA process
PBS administers these COBRA processes on behalf of participating employers, while the applicable insurance carrier or health plan oversees the underlying health coverage.
Employers and HR teams looking for COBRA administration support should visit our COBRA Administration Services page.
How to Enroll in COBRA
If you become eligible for COBRA, you should receive a COBRA election notice explaining your coverage options, costs, deadlines, and how to enroll. Review this information carefully, as your notice contains details specific to your plan.
The COBRA enrollment process includes:
- Receive and review your COBRA election notice.
- Choose whether to elect continuation coverage within your election period.
- Submit your election according to the instructions provided.
- Make your initial premium payment within the required timeframe.
- Continue making payments by the applicable deadlines to maintain coverage.
If PBS administers your COBRA benefits, follow the enrollment and account instructions included in your PBS participant materials.
COBRA Coverage, Costs & Duration
COBRA allows you to continue the group health coverage you had before your qualifying event. Depending on your employer’s plan, this may include medical, dental, vision, and other eligible group health benefits.
The length of COBRA coverage depends on the qualifying event and other circumstances, with most continuation periods ranging from 18 to 36 months.
Participants may be required to pay up to 102% of the total cost of coverage, including the employee and employer portions of the premium, plus up to a 2% administrative charge. Refer to your election notice for your specific premium, benefits, and coverage period.
Making COBRA Payments
After electing COBRA, participants have at least 45 days to make the initial premium payment. Subsequent payments have at least a 30-day grace period. Missing an applicable payment deadline may result in termination of COBRA coverage.
If PBS administers your benefits, use the payment and account instructions provided in your PBS materials. To access your account, manage COBRA payments, or review your participant information, visit the PBS COBRA Participant Login.
Please refer to your State’s Health Insurance Exchange if you choose to not elect COBRA through your prior employer
A health insurance exchange is an online marketplace where consumers can compare and buy individual health insurance plans.
https://www.healthinsurance.org/glossary/health-insurance-exchange/
COBRA Coverage FAQs
How long do I have to elect COBRA coverage?
You have at least 60 days to elect COBRA, measured from the later of the date your election notice is provided or the date you would otherwise lose coverage due to the qualifying event.
Can I pay COBRA premiums with my HSA?
Yes. HSA funds can be used tax-free to pay COBRA continuation coverage premiums. Learn more about Health Savings Accounts (HSAs).
Can my spouse or dependents elect COBRA coverage?
Eligible spouses and dependent children may have independent rights to elect COBRA coverage following a qualifying event. Eligibility depends on the circumstances and applicable plan rules.
What happens if I miss a COBRA payment?
After the initial premium, COBRA plans provide at least a 30-day grace period for payments. If the required payment is not made within the applicable grace period, your coverage may be terminated.
Do I receive a new insurance card when I elect COBRA?
Insurance card issuance depends on your health plan and carrier. Contact your insurance carrier if you have questions about your ID card.
What if I need medical care before my COBRA coverage is activated?
When COBRA is elected within the required timeframe, and applicable premiums are paid, coverage typically begins from the date your previous coverage ended. Contact PBS or your insurance carrier with questions about your enrollment status.
How do I end my COBRA coverage?
Contact PBS for instructions if you want to end your COBRA coverage. Before ending coverage, consider when any replacement health coverage will begin.
Need Help With Your PBS COBRA Coverage?
If PBS administers your COBRA benefits, use your participant materials and PBS account information to manage your election, payments, and coverage. Contact PBS if you need help with your account or next steps.