US Leave and Benefits: FMLA and COBRA

COBRA (Consolidated Omnibus Budget Reconciliation Act) allows you to continue your employer-sponsored group health coverage for a limited period after it would otherwise end. For the most common qualifying event — involuntary job loss or voluntary resignation (but not termination for gross misconduct) — the standard COBRA period is 18 months. If you are disabled at the time of the qualifying event (or become disabled within 60 days), coverage can be extended to 29 months.

For other qualifying events — divorce or legal separation from the covered employee, death of the covered employee, or a dependent child losing dependent status under the plan — the COBRA period is 36 months. If a second qualifying event occurs during an initial 18-month COBRA period (for example, the covered employee dies after being laid off), beneficiaries may be entitled to extend to 36 months total.

COBRA applies to employers with 20 or more employees. You must elect COBRA within 60 days of losing coverage (or receiving the election notice, whichever is later) and pay premiums retroactively to the date coverage would have ended. Premiums can be up to 102% of the full group rate — often significantly more than you paid as an employee. Before electing COBRA, compare ACA marketplace plans — if you lost job-based coverage, you have a 60-day special enrollment window.

The Family and Medical Leave Act (FMLA) of 1993 entitles eligible employees to up to 12 weeks of unpaid, job-protected leave per 12-month period for: the birth, adoption, or foster placement of a child; a serious health condition affecting the employee; caring for a spouse, child, or parent with a serious health condition; or qualifying military exigencies. Up to 26 weeks is available for military caregiver leave.

To be eligible, you must work for an employer with 50 or more employees within 75 miles, have worked for the employer for at least 12 months, and have at least 1,250 hours of actual work in the previous 12 months. Leave can be taken all at once or intermittently (by the day or hour where medically necessary).

During FMLA leave, your employer must maintain your health insurance on the same terms as if you were still working. On return, you must be restored to the same or an equivalent position with the same pay, benefits, and conditions. Retaliation for taking FMLA leave is prohibited — you can file a complaint with the DOL or sue in federal court.

The FMLA prohibits employers from interfering with, restraining, or denying FMLA rights — and from retaliating or discriminating against employees who exercise those rights. Firing someone because they took FMLA leave is illegal. The burden shifts to the employer to show the termination was for a reason unrelated to the protected leave.

Employers can lawfully terminate during FMLA leave if: the employee would have been terminated regardless of the leave (e.g., a pre-planned layoff that includes the employee's position); the employee committed serious misconduct before or during leave; or the employee fails to provide required medical certification or cannot perform the essential functions of their job even with reasonable accommodation after the 12 weeks expire.

If you believe you were fired in retaliation for FMLA leave, you can file a complaint with the Department of Labor's Wage and Hour Division or bring a private lawsuit within 2 years (3 years for willful violations). Remedies include reinstatement, back pay, and liquidated damages.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 gives employees (and their covered dependants) the right to continue group health coverage for a limited period after qualifying events — including voluntary or involuntary job loss, reduction in hours, transition between jobs, death, divorce, or a dependent child ageing off a parent's plan.

For job loss or reduction in hours, coverage can continue for up to 18 months. For other qualifying events, 36 months. COBRA applies to employers with 20 or more employees. You must be notified of COBRA rights within 14 days of the qualifying event; you have 60 days to elect continuation.

The significant drawback: you pay 100% of the premium — including the share your employer previously subsidised — plus a 2% administrative fee. COBRA is often very expensive. Compare it against Marketplace coverage (via healthcare.gov), a spouse's employer plan, or Medicaid/CHIP. You may qualify for premium tax credits on the Marketplace that make it significantly cheaper than COBRA.