What is mini-COBRA? How does mini-COBRA differ from alternatives?

Mini-COBRA is a term applied to continued coverage laws in some states. It applies to employer plans with less than 20 employees. In mini-COBRA plans it is the insurance company and not the former employer who is responsible for administration of the plan. This provision is very similar to the "individual conversion" option already offered by most group insurance plans except that the eligibility and administration looks like a regular COBRA plans rather than individual insurance. Now with the new economic stimulus plan the 65% subsidy will be available to eligible laid-off workers but the Treasury Department has not issued clarification as to how this will work. Since the insurance company administers the program but the employer is eligible for the tax reduction, it is unclear how the mini-COBRA will be funded. Many small companies do not have the available cash flow to "float" the cost of former employees' health benefits until they can receive a tax credit. So, as a practical matter, the subsidy is not available yet. Health insurance companies are expected to announce administrative details as soon as the federal government clarifies the subsidy program. The best source of information in mini-COBRA plans is the member benefits department of your employer-provided insurance. 

Another difference between the COBRA plan and the mini-COBRA plans is that the mini-COBRA plans have no retroactive provisions of 2nd chance enrollment periods.

COBRA alternatives are available to in a wider range of situations, cost less, but are not a continuation of the same plans so they do not provide the same coverage for pre-existing medical conditions. 

revised 3/19/09

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COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.