What COBRA costs and how long you can keep it

This page is for people facing the loss of job-based health coverage during cancer treatment, and for their families. It explains what COBRA is, what it costs, how long it lasts, and the deadlines that matter.

COBRA is the rule that lets workers and their families keep the group health coverage they already had. It applies when something happens that would otherwise end that coverage. The Department of Labor describes it as applying to people who lose health benefits through certain events. These include voluntary or involuntary job loss, a reduction in hours worked, a transition between jobs, death, divorce, and other life events. It applies to group health plans sponsored by employers with 20 or more employees.

The key feature for anyone mid-treatment is continuity. It is the same plan, the same network, and the same formulary (list of covered drugs). Nothing about your care has to be renegotiated.

COBRA does not give you new insurance. It stops you losing the insurance you have.

Under COBRA you generally pay the entire premium, plus 2%. The entire premium means the share you used to pay plus the share your employer was quietly covering. The Department of Labor puts the ceiling at 102% of the cost to the plan.

Most people have no idea what their employer was contributing until this moment. That is why the first invoice is a shock. It is not a penalty and it is not a mark-up on illness. It is the actual cost of the coverage, now visible.

During a disability extension, plans may charge up to 150% of the premium for the extended months, while 102% applies to other continuation.

Cost is one half of the decision. The other half is time. The duration depends on which event triggered it:

• 18 months — job loss or reduced hours, for the employee, spouse, and dependents.
• 36 months — in these situations:
  • When job loss or reduced hours comes within 18 months after the employee became entitled to Medicare: up to 36 months after the date of Medicare entitlement.
  • For a former spouse and dependents, after divorce or legal separation.
  • For surviving family members, after the employee's death.
  • For a child who loses dependent status.

Two extensions exist. A disability extension can add up to 11 months, bringing the total to 29. A second qualifying event during the initial period can extend coverage to 36 months in total.

Line those numbers up against your treatment plan. If your oncologist expects treatment to run well past 18 months, that is worth knowing at the start, not at month 17.

At least 60 days to elect. Your election period starts when your coverage ends or when your COBRA election notice is provided or mailed to you, whichever is later.

At least 45 days to make the first payment. The plan cannot require a payment when you elect. It must give you at least 45 days after you elect to make the first one. If you miss that window, the plan can end your COBRA rights.

The Department of Labor guide does not explain how coverage dates work while you are deciding. Before you wait, ask the plan administrator in writing how claims in that period would be handled, so you are not left uninsured by accident.

The Department of Labor notes that being offered COBRA does not make you ineligible for Marketplace coverage or a tax credit, and that you can special enroll in a Marketplace plan within 60 days before or after losing job-based coverage. So the question is rarely "COBRA or nothing." It is usually a trade between cost and continuity.

Things worth checking before you decide:

• Would a different plan put your oncologist or your cancer center out of network?
• Are your current medicines on the other plan's covered drug list, and at what tier?
• Would you need new prior authorizations for treatment already approved?
• How much of your current plan's out-of-pocket maximum have you already spent this year?

That last one is easy to forget and can be decisive. Ask whether what you have already spent this year would count toward a new plan's out-of-pocket maximum.

Keep paying on schedule. The plan must allow monthly payments if you ask, and must give at least a 30-day grace period for each payment. The plan can end your coverage if full payment is not received before the grace period ends.

Set a standing payment and keep proof. Put the end date of your COBRA period in your calendar the day you elect. Add a reminder a couple of months earlier, so the next decision does not arrive unannounced.