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If you’re in Texas and you lose employment, you might feel like you’ve stepped into the Wild West. Thankfully, COBRA is an option that allows you to maintain your and your family’s health coverage while you line up your next job. But it is expensive, and there might be other insurance options that fit your budget better. Knowing your insurance options is critical — read on to learn more.
What is COBRA?
COBRA is a system that allows you to continue health coverage for a span of time after you leave employment. COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act of 1985, the federal law that established this system. Basically, COBRA permits you and your dependents to keep their health insurance — including dental and vision — for a specified period after your employment ends.
In Texas, COBRA is administered by the Texas Employees Group Benefits Program (GBP) and is often called COBRA continuation coverage.
If you weren’t terminated for gross misconduct — like for doing something illegal — you and your family can maintain the same health insurance policy you had through your employer. However, you will likely pay a hefty price without your employer covering the cost.
COBRA coverage is also available in Texas for those who experience certain life events, like divorce or a child aging out of being an dependent.
How does COBRA work?
In most cases, COBRA coverage kicks in if you have health coverage through your employer and your employment ends. It is also available following certain life events that impact your health insurance, like divorce. You are also eligible for COBRA if you lose health coverage by going from full-time to part-time employment.
Texans who work for employers with less than 20 employees, certain religious organizations, or the federal government probably are not eligible for COBRA. Also, if you were fired for gross misconduct, usually meaning you put someone in danger or committed an illegal act, you aren’t eligible.
You have 60 days after your employment ends to sign up for COBRA. The health plan you will have through COBRA will be the same as the one you had at work, but you will be paying for it all yourself. This is why the cost of COBRA seems so much higher than the plan you had before.
You and your dependents can keep COBRA insurance for 18 months after your employment ends. In Texas, you can keep COBRA insurance for six months longer through the state program. However, there are more laws that impact this continuing coverage, like you usually aren’t eligible if you were terminated for cause. In some cases, though, you can maintain your health coverage through state continuation in Texas for six months even if you aren’t eligible for COBRA.
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How much does COBRA cost in Texas?
In Texas, COBRA rates change slightly year to year. Right now, we are in plan year 2023 and the costs are effective until August 31, 2023.
Texas COBRA Rates for Plan Year 2023 (9/1/22 – 8/32/23)
| Health Insurance | ||||
| Plan | You Only | You & Spouse | You & Child(ren) | You & Family |
| HealthSelect of Texas® | $635.05 | $1,365.37 | $1,124.04 | $1,854.36 |
| Consumer Directed HealthSelectSM | $589.15 | $1,237.06 | $1,007.78 | $1,701.58 |
| Dental Insurance | ||||
| Plan | ||||
| DeltaCare® USA DHMO | $8.80 | $17.61 | $21.13 | $29.92 |
| State of Texas Dental ChoiceSM | $29.30 | $58.61 | $70.33 | $99.63 |
| Vision Insurance | ||||
| Plan | ||||
| State of Texas VisionSM | $4.70 | $9.40 | $10.11 | $14.81 |
All rates include a 2% administrative fee. Also, there is a $30 premium if you or your dependents smoke tobacco or if you fail to certify as a non-tobacco user.
COBRA is only one form of health insurance you can purchase after leaving employment – you don’t need to sign up for COBRA if you want to find a cheaper option. However, it is always smart to maintain health coverage regardless of your employment status.
How to enroll in COBRA in Texas
You have 60 days from the end of your job to sign up for COBRA in Texas. You must inform your former employer in writing that you want COBRA. To apply for state continuation in Texas after your COBRA expires — or if your job didn’t qualify for COBRA — you must have had insurance coverage for the three months before your job ended.
Your healthcare policy will remain the same, but you will be paying for all of it. That is, there will no longer be any contributions from your employer, which is why the cost is so much higher.
The COBRA coverage will end before the 18 months are up if you get insurance from another source, don’t pay your premiums or your former employer stops offering health insurance.
