Your COBRA Rights: What You’re Entitled to After Losing Employer Health Coverage

Losing your job or experiencing a major life change can be stressful enough, but what happens when your health insurance disappears along with it? 

That’s where COBRA comes in.

COBRA, short for the Consolidated Omnibus Budget Reconciliation Act, gives many employees and their families the right to continue their employer-sponsored health insurance after losing coverage due to job loss, reduction in work hours, divorce, or other qualifying life events.

While COBRA is meant to be a safety net, many people aren’t fully aware of their rights under the law, and employers don’t always follow the rules. 

If your COBRA rights have been violated, you may be entitled to legal compensation. Contact Morgan & Morgan today for a free case evaluation to learn more about your legal options and what you may be owed.

What Is COBRA?

COBRA is a federal law that was passed in 1985 to protect employees and their families from losing health coverage after major life events. It applies to employers with 20 or more employees who offer group health insurance plans.

Under COBRA, eligible individuals can temporarily continue their existing group health plan at their own expense, plus a small administrative fee, after losing access to coverage through their employer.

Your key COBRA protections include:

• The right to elect continuation coverage after a qualifying event.
• The right to receive timely notice about your COBRA eligibility.
• The right to the same exact health benefits you had under your employer’s plan.
• The right to continue coverage for up to 18 or 36 months, depending on the situation.
  
   

Who Is Eligible for COBRA Coverage?

You qualify for COBRA if:

• Your group health plan is covered by COBRA. Most private-sector employers with 20+ employees are required to comply with COBRA.
• You experience a qualifying event that causes you to lose your health coverage.
• You were enrolled in the employer’s group health plan on the day before the qualifying event.
  
   

Common qualifying events for employees can include:

• Voluntary or involuntary job loss (excluding gross misconduct).
• Reduction in work hours resulting in loss of coverage.
  
   

Employee spouses may also qualify because of:

• The employee’s job loss or reduction in hours.
• Divorce or legal separation from the employee.
• The employee becomes eligible for Medicare.
  
   

For dependent children:

• All of the above, plus
• Loss of dependent child status under the plan’s terms (such as turning 26 under ACA rules).
  
   

How Long Does COBRA Coverage Last?

COBRA coverage typically lasts 18 months after the qualifying event. However, in some situations, you can extend coverage to up to 36 months, especially for dependents or if a second qualifying event occurs.

For instance, if you're laid off from work, you're eligible for 18 months of COBRA. If you're disabled (as determined by the Social Security Administration) within the first 60 days of COBRA coverage, you may be eligible for 29 months. If your spouse or dependent child loses coverage due to your death or divorce, they may be eligible for 36 months.

 

How Much Does COBRA Cost?

While COBRA allows you to keep your employer-sponsored plan, it doesn’t come cheap. You'll be responsible for the full cost of the premium plus a 2% administrative fee. That includes both what you used to pay and what your employer used to pay.

For many people, COBRA premiums can be significantly higher than what they were paying while employed. That said, for those who need to maintain continuity of care, especially with chronic conditions or ongoing treatments, it can be a good temporary solution.

What Notices Are Required Under COBRA?

One of the most important elements of COBRA is the employer’s legal obligation to notify you of your rights. If your employer or plan administrator fails to notify you in a timely or accurate manner, they could be held liable.

Required notices include:

• Initial COBRA Notice: Must be sent within 90 days of coverage starting.
• Qualifying Event Notice: Must be provided within 14 days after a qualifying event (e.g., job loss).
• COBRA Election Notice: Explains how to enroll in COBRA coverage and must be sent within 14 days of the employer being notified of the qualifying event.

Failure to receive one of these notices can have serious consequences, especially if you miss your window to enroll and lose health coverage altogether.

What Happens if Your Employer Violates COBRA?

Employers who fail to follow COBRA rules by not providing proper notices, by denying coverage, or by terminating COBRA early without cause can be sued for damages.

Examples of COBRA violations could be:

• Not sending COBRA election notices within the legal timeframe.
• Sending notices that are incomplete, confusing, or misleading.
• Failing to inform the employee’s spouse or dependents of their separate rights.
• Wrongfully denying COBRA coverage altogether.
• Canceling COBRA coverage before the time limit without proper cause.

Fortunately, there are legal remedies for these common violations. Under the law, individuals affected by COBRA violations can seek:

• Statutory penalties of up to $110 per day per violation.
• Reinstatement of health coverage.
• Compensation for medical expenses incurred due to lack of coverage.
• Attorneys’ fees and court costs.

At Morgan & Morgan, our attorneys can assess whether your rights were violated and help you pursue the compensation you’re owed.

COBRA vs. Other Health Coverage Options

While COBRA can be a lifeline, it's not the only option available after losing employer-based coverage.

Alternatives to COBRA can include:

• Marketplace Plans (Healthcare.gov): May be more affordable, especially if you qualify for subsidies.
• Medicaid: If your income drops significantly, you may qualify for Medicaid coverage.
• Spouse’s Plan: You may be eligible to enroll in your spouse’s employer-sponsored plan due to a qualifying life event.
• Short-Term Health Plans: These can be cheaper but offer fewer protections and benefits.

Still, COBRA may be the best short-term choice if you need immediate continuity of care or have complex medical needs.

When to Contact a COBRA Attorney

If your COBRA coverage was denied, delayed, or disrupted, or if you didn’t receive the proper notices, you may have a legal claim. These violations can result in serious medical consequences and financial harm.

You may not always need a lawyer for COBRA coverage concerns, but an attorney may be necessary if:

• You never received a COBRA election notice.
• You received a notice too late to make an informed decision.
• Your coverage ended early without explanation.
• Your employer gave you false or misleading information about COBRA.
• You incurred high medical bills after losing coverage without warning.

At Morgan & Morgan, our experienced employment law attorneys can evaluate your situation, help you understand your rights, and pursue justice on your behalf. Plus, you pay nothing unless we win your case.

We understand the emotional and financial toll of losing health coverage, especially when it happens unfairly or illegally. We can help you fight back, get the coverage you deserve, and pursue compensation for the harm done.

If you believe your COBRA rights have been violated, don’t wait. Contact us today for a free, no-obligation case evaluation.

Frequently Asked Questions 

How long do I have to elect COBRA coverage?

You have 60 days from the date you receive your election notice or the date your coverage would otherwise end, whichever is later.

An attorney can help if you received notice late or not at all.

Can my employer deny me COBRA?

Only in very specific circumstances, such as if you were terminated for gross misconduct, can an employer deny COBRA. Most former employees are legally entitled to coverage.

Is my employer allowed to change my coverage during COBRA?

Your employer can change the coverage only if they make the same changes for active employees. You are entitled to the same coverage that current employees receive under the group plan.

Can I sue my employer for COBRA violations?

Yes. If your employer failed to comply with COBRA laws, you may be eligible to sue for damages. Contacting an employment attorney as soon as possible is essential to preserve your rights.

At Morgan & Morgan, we have over 35 years of experience fighting For the People, and we’ve recovered over $25 billion in the process. If you suspect your employer is breaking the rules, contact us today.

Hiring one of our lawyers is easy, and you can get started in minutes with a free case evaluation.