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How COBRA Works

Did you recently leave a job and lose your healthcare benefits? If so, you might have gotten a COBRA notice.

The COBRA notice will spell out your rights to remain on your former employer’s health plan for 18 months (longer in some cases).

If you are in this situation, what should you do?

It depends really on your prospects for other coverage. Are you starting a new job with benefits pending? Let’s say you have no coverage at all scheduled to take effect and you’re relatively healthy with no immediate needs for large healthcare expenditures.

Either way, here are a few COBRA election tips:

Tip #1

Your former employer must give you a written COBRA notice that clearly shows your options and costs for continuing health and/or dental coverage.


Tip #4

If you elect to continue coverage within the 60 day window, you have 45 days to make a payment.



Tip #2

You have 60 days to elect COBRA. The 60 days starts from the day you physically received the notice, not your last day of employment or coverage. If some time goes by after your last day of employment and you still haven’t received the letter, demand it.

Tip #5

If you don’t make the payment within 45 days, your right to continue coverage will end.



Tip #3

Your employer will cancel your coverage when your employment ends. If you elect COBRA, your coverage will be reinstated retroactively so that you have no gap in benefits.

Tip #6

When you make your first payment, you will be required to pay all premiums back to your original cancellation date. Remember, there will be no gap in coverage.


So, in effect you have a 105 day window from the day you receive your COBRA notice to effectively have health insurance coverage without paying for it.


Also remember, you must formally elect coverage within 60 days. The only downside is that if you do need to activate coverage after 100 days (60 days plus an additional 40), you will pay back 3-4 months in premium all at once. This would only make sense if you incurred a large, unexpected medical bill.

Bottom line, if you are healthy, then ride out the waiting period.

If you have a new coverage effective date scheduled, use the 105 days to get to that effective date without paying a COBRA premium if possible.


One additional little known fact is that if you had previous family coverage with your former employer, the employee does not need to continue their coverage to allow a spouse or child only to continue theirs.

Example: Let’s say you have a child with an ongoing medical concern and everyone else in the family is healthy. Why pay the premium for the employee and other family members when only your child needs the coverage continued? This will allow everyone else to consider a lower cost individual plan such as a one year short term plan.


If you have questions about COBRA or your current health insurance plan, email me at or give me a call at 615-376-8899.

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