COBRA and You (Young Adults up to age 26)

What is COBRA?

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) allows most customers to continue with their existing Employer Sponsored Coverage (ESC) for a limited period of time, typically at a higher cost than when they were employed, as employers aren’t required to pay any portion of the premiums and can charge an additional 2% for administrative costs. Customers have 60 days from their last day of health coverage or when they received the election notice to enroll in COBRA continuation coverage.

Other Considerations to take:

• Instead of choosing COBRA continuation coverage, qualified customers who lose Employer Sponsored Coverage (ESC) may enroll in individual health insurance coverage, with Get Covered Illinois with 60-days from coverage loss.

• Voluntarily dropping COBRA does NOT qualify as a loss of coverage for Special Enrollment Periods (SEP) purposes. HOWEVER, there might be exceptions if the employer subsidized the COBRA premiums and that subsidy ends. In this case, the loss of the subsidy COULD trigger a SEP.

• An SEP would be triggered when the COBRA coverage expires, usually after 18-36 months.

• A customer can terminate COBRA coverage and obtain health coverage through Get Covered Illinois during
  Open Enrollment.

• Young adults who age off ESC can choose COBRA, Get Covered Illinois, or Illinois Medicaid programs depending on their situation.

Coverage Under a Parent’s Plan

Young adults are eligible to enroll in or remain on health coverage under their parent’s health plans until they turn 26 if those plans cover dependent children. If a young adult is covered by a parent’s job-based plan, their coverage usually ends when they turn 26, however, they should check with the employer’s plan. If a young adult is on a parent’s Marketplace plan, they can remain covered through December 31st of the year they turn 26.

An image of a young woman talking with an expert.

Image courtesy of iStock.