Table of Contents
- Health Insurance & COBRA: What Happens When You Lose Your Job?
- What Is COBRA?
- When Does COBRA Apply?
- How Long Does COBRA Coverage Last?
- How Much Does COBRA Cost?
- What Are Your Employer’s Obligations?
- What If You Were Fired?
- What If You Can’t Afford COBRA?
- What Happens If You Don’t Choose COBRA?
- Can You Sue Your Employer Over COBRA Violations?
- Final Thoughts: Don’t Let Your Health Coverage Slip Through the Cracks
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Losing your job can be overwhelming, especially when it also means losing your health insurance. Understanding your rights under COBRA is crucial for maintaining coverage during this transition, and consulting with an attorney near you can help you navigate the complexities of health insurance after job loss.
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Discover how COBRA can help you retain your health insurance after job loss, including eligibility requirements, costs, and your employer's obligations. If you have questions or need assistance, connect with an attorney near you to protect your rights and navigate the complexities of health coverage.
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Mar 29, 2025 04:27 PM
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Health Insurance & COBRA: What Happens When You Lose Your Job?
Losing your job is stressful enough. But when that pink slip also means losing your health insurance? That’s when stress turns into panic.
Fortunately, federal law provides a safety net through something called COBRA—but it’s not always easy to understand, and it’s definitely not cheap.
If you're wondering what happens to your health insurance when you lose your job, this guide breaks it all down. We'll explain how COBRA works, who qualifies, how long coverage lasts, what it costs, and what to do if your employer doesn't follow the rules. You’ll also learn when it’s time to talk to an attorney near you to protect your rights.
💡 For every post in this series, scroll down to “Related Posts.”
What Is COBRA?
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act—a federal law that gives you the right to keep your employer-sponsored health insurance coverage after a qualifying life event, like losing your job.
COBRA doesn’t give you new insurance—it simply allows you to continue your current health plan, at your own expense, for a limited time.
It’s your bridge between jobs. It’s your backup plan if you’re not ready to go without healthcare.
When Does COBRA Apply?
You qualify for COBRA continuation coverage if you lose your job and:
- Your employer-sponsored health insurance was active before termination
- Your job loss was voluntary or involuntary (even if you were fired)
- The employer has 20 or more employees
Other qualifying events for COBRA coverage include:
- Reduction in work hours
- Divorce or legal separation from a covered employee
- Death of the covered employee
- A dependent child aging out of coverage
How Long Does COBRA Coverage Last?
COBRA coverage usually lasts:
- Up to 18 months after job loss or reduction in hours
- Up to 36 months for certain events (e.g., divorce or death of a covered employee)
- An additional 11 months (total 29) if you qualify for disability extension
Keep in mind—this coverage isn’t indefinite, and you need to plan ahead before it runs out.
How Much Does COBRA Cost?
Here’s the big downside: COBRA is expensive.
Under COBRA, you’re responsible for the entire premium—both the portion your employer used to pay and your share—plus a 2% administrative fee.
On average, that means:
- Individual COBRA coverage: $400–$600/month
- Family COBRA coverage: $1,500–$2,000/month
It’s not uncommon to feel sticker shock. That’s why many workers explore alternatives like Affordable Care Act (ACA) Marketplace plans, Medicaid, or short-term insurance instead.
Need more details on ACA plans? Read: Understanding the Family Medical Leave Act (FMLA)
What Are Your Employer’s Obligations?
Once your employment ends, your employer (or their insurance provider) must:
- Notify the health plan administrator within 30 days
- The plan administrator then has 14 days to send you a COBRA election notice
- You have 60 days to decide whether to enroll
- If you elect COBRA, coverage begins retroactively from your last coverage day
If your employer fails to notify you or delays your COBRA paperwork, you may miss the enrollment window—and they could be held legally liable. Talk to an attorney near you if this happens.
What If You Were Fired?
Good news: Even if you were fired, you’re still entitled to COBRA (unless the firing was for gross misconduct—rare, and hard to prove).
Employers sometimes falsely claim misconduct to dodge COBRA responsibilities. If your coverage was denied based on “misconduct,” contact a lawyer near you immediately. That could be illegal retaliation or a breach of benefits law.
What If You Can’t Afford COBRA?
If COBRA is too expensive, you have other options:
- ACA Health Insurance Marketplace – May offer cheaper coverage with subsidies
- Medicaid – Available if your income drops significantly
- Spouse’s employer-sponsored plan – Qualifying life event lets you join
- Short-term insurance plans – Temporary coverage (less comprehensive)
But don’t delay—some alternatives require you to act within 60 days of job loss.
What Happens If You Don’t Choose COBRA?
If you decline COBRA and don’t enroll in another plan within 60 days, you may be uninsured until your next enrollment window—which could mean:
- No coverage for emergencies
- Full out-of-pocket cost for prescriptions or treatments
- Penalties if you delay enrolling in Medicare or other plans later
Talk to a lawyer near you if your employer failed to provide timely notice or misrepresented your options.
Can You Sue Your Employer Over COBRA Violations?
Yes—employers can be held legally responsible for COBRA-related violations, such as:
- Failure to provide notice
- Delayed paperwork
- Denial of coverage
- Misuse of termination categories to block access
- Retaliation for attempting to use benefits
If you’ve experienced any of these, you may be entitled to:
- Reinstatement of coverage
- Financial damages
- Legal costs
- Statutory penalties (up to $110 per day of noncompliance)
Your best next step? Get advice from a lawyer near you who understands employee benefits law.
Final Thoughts: Don’t Let Your Health Coverage Slip Through the Cracks
Losing your job is hard enough—don’t let it cost you your health insurance too. COBRA is your legal right, not a favor from your employer. But like any benefits law, it comes with rules, timelines, and pitfalls.
If your employer didn’t follow the rules—or you just need help understanding your options—ReferU.AI is here to help.
We connect you instantly with a top-rated attorney near you who specializes in employee benefits and COBRA violations. Our service is fast, free, and powered by real court performance—not just ads.
Don’t wait until a medical bill wrecks your finances. Let ReferU.AI help you protect your coverage—and your rights—starting today.
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