Health Insurance Continuation Coverage Under COBRA

Janet Kinzer
Information Research Specialist

Meredith Peterson
Information Research Specialist

Most Americans with private group health insurance are covered through an employer, coverage that is generally provided to active employees and their families, and may be extended to retirees. A change in an individual's work or family status can result in loss of coverage. In 1985, Congress enacted legislation to provide temporary access to health insurance for qualified individuals who lose coverage due to such changes. Under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA; P.L. 99-272), an employer with 20 or more employees must provide those employees and their families the option of continuing their coverage under the employer's group health insurance plan in the case of certain events. The coverage, usually for 18 months, can last up to 36 months, depending on the nature of the triggering event. Employers who fail to provide the continued health insurance option are subject to penalties. 

Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8%. Many of these individuals were eligible to continue their employer-sponsored health insurance, but did not elect coverage under COBRA because of the cost. On average, employees pay 27% of the premium for family coverage under an employer-sponsored health insurance plan. Those extending coverage through COBRA can be required to pay up to 102% of the premium, which averaged $13,643 for a family in 2009. Congress addressed this issue under Title III of the American Recovery and Reinvestment Act (ARRA; P.L. 111-5), which included a temporary 65% subsidy for COBRA premiums. The subsidy is available to individuals who meet the income test and who are involuntarily terminated on or after September 1, 2008, and before May 31, 2010. 

The 111th Congress is currently considering whether to extend COBRA benefits beyond the current coverage. Some argue that even with the subsidy, high premiums make COBRA coverage unaffordable to many. Others maintain that in requiring employers to provide former employees with the option of continuing their health insurance coverage, COBRA has resulted in extra costs for employers (in the form of increased premiums for employers' group health insurance policies), as well as added administrative burdens. 

This report provides background information on continuation health insurance under COBRA and on the COBRA population.


Date of Report: April 16, 2010
Number of Pages: 15
Order Number: R40142
Price: $29.95

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