Eligible Persons

• COBRA health insurance laws only apply to companies with a group policy covering 20 or more employees. The employee must have been eligible for the company health plan during employment. This coverage extends beyond the private sector, applying to employees of government agencies as well. Spouses and dependent children of the employee are also eligible for continued COBRA coverage by the employer's health plan.
  
  

Qualifying Events

• For an employee or his family to be eligible for health insurance coverage under COBRA, there must be a qualifying event. This can be a reduction of hours from full-time to part-time, resignation or termination of employment, so long as the employee was not terminated for gross misconduct. Qualifying events that entitle a family member to COBRA protection include divorce, changes in dependent status, death of the covered employee or the employee's eligibility for Medicare instead of the employer's health insurance.
  
  

Time Frame

• If the qualifying event was a termination or status change to part-time, the employee is entitled to COBRA health insurance coverage for 18 months. If the qualifying event was a family-related change, such as divorce, death or Medicare eligibility, COBRA coverage is provided for 36 months. Once the employee obtains coverage under his own health insurance policy or a new employer's group plan, COBRA coverage under the previous employer's plan ends and cannot be restarted, even if the applicable time period has not expired.
  
  

Amount

• The premiums for continuing insurance under COBRA can be significantly more expensive than the employee was previously paying to be covered by the company's health plan, especially since many employers pay a portion of the premiums for their employees. COBRA payments are generally 102 percent of the actual insurance premium, plus any disability coverage.
  
  

Warning

• The insured party must continue to pay the premiums or the coverage will be canceled. All deductibles or co-payments are also the insured's responsibility. The available benefits may be limited under COBRA continuation coverage, making it a less appealing option than signing up for a new health plan.