COBRA Archives

“Subsidized COBRA in Severance – What’s that?”

Published on July 19th, 2016 by Alan L. Sklover

Question: Dear Alan: I was recently laid off from my job in pharmaceutical sales, and received a small severance. I signed up for COBRA healthcare continuation for my family. When the bill came, for family coverage all I had to pay for my entire family was $325 monthly. That is far less than I thought it would cost.

Concerned that there was a mistake, I called Human Resources, and was told that it was not the usual COBRA benefits, but “Subsidized” COBRA benefits. What does that mean?

Bozeman, Montana

Answer: Dear Emy: Good question, as many employees don’t know the difference, and many lose out because of this lack of knowledge. Let me do my best to explain.
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COBRA: The 21 Most Frequently Asked Questions

Published on April 21st, 2011 by Alan L Sklover

“Health nuts are going to feel stupid someday,
lying in hospitals dying of nothing.”

- Redd Foxx

ACTUAL CASE HISTORIES*: We are frequently asked questions about COBRA, the federal workplace law that is probably utilized by more employees than any other. It’s a great law, very practical in its effect, and immediate in its advantages.

To assist people in this regard, we’ve put together a list of the 21 Most Frequently Asked Questions about COBRA, along with their answers. They are presented below.

LESSON TO LEARN: If you are in danger of losing your employer-provided health care coverage, you are likely able to take advantage of the federal COBRA law, which provides a mechanism to obtain health care coverage continuation. But, before you can exercise your legal rights, you need to know your legal rights. Here’s a summary of the COBRA basics you ought to know.

WHAT YOU CAN DO: Take a few minutes to review these 21 Most Frequently Asked Questions about COBRA-mandated health care continuation coverage. Some of your rights may surprise you:
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“To be eligible for COBRA coverage, must I be on my employer’s medical plan for any certain period of time?”

Published on June 10th, 2010 by Alan L Sklover

Question: Regarding COBRA, to be eligible, is there a minimum time period you need to be covered under an employer’s health insurance plan to be eligible for COBRA?

Does that change if you leave the company voluntarily? Thanks!

Houston, Texas

Answer: Dear Daisy: You need to be on your employer’s health care plan for One Day before you leave your job to be eligible for COBRA. That’s it.

And it makes no difference if you resigned, or were laid off, or were let go.

However, if you were fired for “gross misconduct,” then you are ineligible for COBRA benefits.

To view our newsletter entitled “Ten Circumstances When COBRA is NOT Available to You” [click here].

Hope that helps. Thanks for writing in. Please tell your friends about our blog.

           Best, Al Sklover

©  2010 Alan L. Sklover, All Rights Reserved.

“If my employer has declared bankruptcy, can I still get COBRA benefits?”

Published on May 1st, 2010 by Alan L Sklover

Question: As of April 1, I have no health insurance. My company went “belly up,” so I guess I have no COBRA to fall back on. Do I have any options?

         Indianapolis, Indiana 

Answer: Craig, it all depends on what you mean by “belly up.”

COBRA permits you to continue on your employer’s health plan after you’ve lost your job, but ONLY IF that health plan is in existence.

When a company declares bankruptcy, it does so generally in one of two ways: under Chapter 7 of the United States Bankruptcy Code, or under Chapter 11 of the United States Bankruptcy Code. 

A. Chapter 7 Bankruptcy: When a company files for bankruptcy under this Chapter, it seeks to “liquidate” itself. That means the company sells all of its assets in order to pay as many of its bills as possible to its creditors, and then the company ceases to exist. If this is the Chapter your employer filed under for bankruptcy, then there is no health care plan, and you therefore have no COBRA rights.

B. Chapter 11 Bankruptcy:  When a company files for bankruptcy under this Chapter, it usually means that the company continues to operate its business under the Court’s protection while it attempts to reorganize its affairs. In many cases, health care plans continue in effect during this process.

Chances are, Craig, that you know whether your employer is still in business. If it is, contact its HR department, and ask whether the health plan remains in effect. If it does, you’re in luck. If not, then you are not.

Like I wrote above, it all depends on what you mean by “belly up.”

Hope this helps.

          Best, Al Sklover

© 2010 Alan L. Sklover, All Rights Reserved.

“If I am on COBRA from my last job, and I become eligible for health insurance from my new employer at a much higher cost, can I stay on COBRA?”

Published on April 24th, 2010 by Alan L Sklover

Question: Six months ago I was let go from my job, and I have remained on my former employer’s health plan through the federal COBRA law.

I am now taking a new job, and my new employer has offered me participation on its health insurance plan. However, the health insurance premiums on my new employer’s health plan are almost double what I am paying for coverage on my former employer’s health insurance plan under COBRA.

Can I opt NOT to join my new employer’s health plan, and instead continue to be covered under my former employer’s plan for the next 12 months through COBRA?

Waukee, Iowa

Answer:  Sorry, P.D., generally, the law says, “No.”

First, the federal COBRA law provides that, once you become eligible for health care coverage on a new employer’s health care plan, you then become ineligible to continue to be covered under your former employer’s plan.

There is an important exception you should be aware of: If one or more members of your family has a pre-existing medical problem that IS covered under the “old” health care plan, but would NOT be covered under the “new” plan because it is a “pre-existing condition,” then you can remain on the “old” plan.

Second, under the American Recovery and Reinvestment Act of 2009, people who were laid off between September 30, 2008 and December 31, 2009 receive a “subsidy” of 65% of their COBRA health insurance premiums, paid by the Federal Government. This “subsidy” is probably why your COBRA health premium on your “old” employer’s plan is so much less expensive than it would be on the “new” employer’s plan.

If you remain on your “old” employer’s health plan after you become eligible under your “new” employer’s health plan, and in this way wrongfully receive the government-provided continued health care subsidy, the Internal Revenue Service can fine you up to 110% of the “subsidy” you improperly received.

The U.S. Department of Labor has a very good website that provides answers to many COBRA-related questions. It is

Sorry if it wasn’t the news you wanted to hear. Nonetheless, I hope this has been helpful.

My Best to You,
Al Sklover

© 2010 Alan L. Sklover, All Rights Reserved.

Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 35 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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