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:
  • For a spouse and dependents, when the employee becomes entitled to Medicare.
  • 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.

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.

45 days to make the first payment. Coverage is retroactive to when your job-based plan ended. So paying within that window closes the gap rather than leaving one.

This combination gives you a real decision period. You can use the 60 days to compare options without being uninsured in the meantime. That is because electing later still restores coverage back to the end date — provided you pay for it.

COBRA is often expensive relative to a Marketplace plan. And losing job-based coverage is itself a qualifying life event for Marketplace enrollment. 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. Switching plans mid-year can reset the counter and restart your spending from zero.

Keep paying on schedule. After the first payment, plans must let you pay monthly, with a 30-day grace period after each due date. Missing the grace period ends the coverage, and plans are not obliged to reinstate it.

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.