Cobra Insurance Coverage for Drug & Alcohol Rehab

Cobra Eligibility & Process

In order to use COBRA to extend your employer coverage, you need to qualify based on the circumstances that caused you to lose health insurance.

COBRA applies when the employer has 20 or more employees, and the reason for an employee’s and/or dependents’ loss of coverage is one of the following:²

• Coverage for dependents upon death of a covered employee.
• Termination or reduction in hours for a covered employee for reasons except for misconduct.
• Divorce or separation from a covered employee.
• A covered employee becoming eligible for Medicare.
• A child’s loss of dependent status and coverage under the plan.

When a qualifying event happens, your employer will give you, the employee, or your dependents an election notice within 14 days.² This notice describes your rights to continue coverage and how to make your choice—all of the information you need to make an informed decision about whether or not to continue coverage.²

Once you receive the notice, you should have at least 60 days to decide whether or not to continue coverage.²

How Much Does Cobra Cost?

The cost of COBRA varies widely depending on the group health insurance plan that your employer has. If you elect to extend your coverage, your employer does not pay any of the plan costs—you pay the full amount. Also, you can be charged an administration fee of up to 2%.²

If you cannot pay the price of COBRA coverage, you have other options. For example, you can enroll in a Marketplace health insurance plan, which may potentially give you a subsidy that can help you afford coverage.⁶ If you lose job-based coverage, that creates a Special Enrollment Period (SEP) that allows you to enroll in a new plan outside of the Open Enrollment period.⁶

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows those who lose health benefits the right to continue their group health coverage for a set period of time.¹ To qualify for COBRA, you need to meet specific conditions.¹

If you’re struggling with substance use, having group coverage through COBRA can fully or partially the cost of substance use disorder treatment. This can give you the support you need to live a happier, healthier life.

What is Cobra Health Insurance?

COBRA is a law that requires most group health plans to offer a temporary extension on health coverage that might otherwise end due to job loss, divorce, or other serious life events.²

When you elect to use COBRA to continue your health insurance, you’ll generally pay the total cost of coverage—the employer is not required to pay anything.² Employers with 20 or more employees offer this coverage, and you need to qualify for COBRA based on specific circumstances.²

The idea for COBRA came from a women’s league working to maintain health insurance coverage after the death or divorce from a spouse.³ The law, passed in 1985, allows COBRA coverage to last 18 or 36 months, depending on the reason for loss of coverage.³

Sources

1. U.S. Department of Labor. (n.d.). Continuation of health coverage (COBRA).
2. Employee Benefits Security Administration. (2016, September) An employee’s guide to health benefits under COBRA.
3. U.S. Department of Labor. (2011, April 7). Celebrating 25 years of COBRA.
4. Healthcare.gov. (n.d.). What Marketplace health insurance plans cover.
5. Health Insurance Marketplace. (2021, May). What you should know about provider networks.
6. Healthcare.gov. (n.d.). COBRA coverage & the Marketplace.
7. National Institute of Mental Health. (n.d.). Substance use and co-occurring mental disorders.
8. National Institute on Drug Abuse. (2020, April). What are the treatments for comorbid substance use disorder and mental health conditions?
9. Findtreatment.gov (2019, October). Treatment options.
10. Substance Abuse and Mental Health Services Administration. (2022, March 30). Medication-assisted treatment (MAT).