How COBRA benefits work in Texas

If you lose your job, you are probably concerned about your health insurance. What happens to your insurance coverage now that you are no longer employed? How will your family be covered?

Thanks to the government, there is a plan for that.

The COBRA plan

The Employee Retirement Income Security Act (ERISA) was signed in 1974. An amendment to the act, the Consolidated Omnibus Budget Reconciliation Act (COBRA) was signed in 1985. COBRA allows employees who lose their jobs to retain health care coverage.

Coverage through COBRA is not available if you were fired for "gross misconduct" or resigned, or if you elect to move from full-time to part-time employment. The coverage is available to you for 18 months, and for 36 months to your spouse and child.

The coverage is limited to the coverage you had when you were employed. COBRA is not covered by plans offered by federal employers or by many church-related groups.

You will pay your company's premium for the group health insurance plan, making COBRA coverage more expensive than what you were paying before you lost your job. However, paying for the group health insurance policy offered by your company is usually much less expensive than the cost of individual health coverage.

How COBRA works in Texas

While the federal COBRA law applies to companies with 20 or more employees, Texas law requires COBRA to be offered by companies as small as two employees if the company offers a health plan.

Also, state law allows for six additional months of coverage after federal COBRA coverage expires. If you or any dependents are disabled, the coverage is available for an extra 11 months.

If you are not eligible for COBRA, under some circumstances you can get state insurance coverage for up to nine months.

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