The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss.

When someone loses their job, they typically can keep their employer-sponsored health coverage for 18 months or up to three years in certain situations. However, the ex-employee generally is responsible for the full premium, and loses out on any company subsidy.

At the same time, COBRA coverage is not considered acceptable insurance in place of Medicare for those who are Medicare-eligible. This issue may cause potential late fees if the person misses deadlines for signing up for Medicare after losing their job, and could possibly lead to services not being covered resulting in big out-of-pocket expenses.

The Heroes Act was created to help subsidize COBRA payments so ex-employees could afford the coverage. In the Great Recession, Congress authorized a 65% subsidy for people in that situation.

Speaking to a knowledgeable Medicare Sales Agent can help in making decisions when situations like these arise.