Keeping health insurance after a job loss: COBRA continuation coverage and subsidies.

Abstract

Many Americans under 65 have health insurance through an employer. Beginning in 1985, a federal law known as COBRA required that eligible workers and their dependents have the option to continue employer-based group health coverage when employment is terminated. Because premiums for COBRA coverage can be very expensive, the 111th Congress included provisions in the American Recovery and Reinvestment Act of 2009 (and subsequent legislation) to temporarily subsidize premiums for those who have lost their jobs since September 2008. This issue brief outlines the eligibility rules for COBRA as well as the current COBRA subsidies. It also discusses the possible choices consumers may face between COBRA and individual insurance with the implementation of insurance market reforms in the Patient Protection and Affordable Care Act.