COBRA Health Insurance Resources for New York Residents
COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage is health insurance that covers you and your family if you suffer a qualifying event and no longer have access to employer group health insurance. In New York, COBRA is subject to federal laws. However, a person that does not fit into the federal guidelines can acquire similar coverage. There are several things to consider when looking into COBRA health insurance in New York. For instance,
- Will you be granted coverage for 36 months?
- Are you entitled to Medicare?
- How many employees are in your company?
- Did your company go out of business?
All of these issues and more are vital to understanding when and how you qualify for COBRA or when you need to look into New York state law that requires employers offer an equivalent coverage option.
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New York COBRA Insurance Coverage
Under the federal government, COBRA Insurance must be offered to people who have a qualifying event to continue the group health plan which was carried under their employer during their time of employment. Qualifying events can include:
- Divorce or Legal Separation from the policyholder
- Death of the Policy Holder
- Termination of Employment
This is standard in all States under the Federal Guidelines of COBRA. COBRA also covers what your insurance covered prior to your qualifying event. The only difference is the cost of the plan shifting from the employer to the covered individuals wishing to continue their insurance coverage.
The cost of the COBRA coverage cannot exceed 102% of the premium paid for the employer group plan. This 102% cap applies to both Federal COBRA and the New York State Continuation of Coverage (Mini-COBRA) required for all fully-insured plans.
Under New York state law (Mini-COBRA), all employers with fully-insured group plans must offer continuation coverage, regardless of size. Furthermore, New York extends the maximum continuation period to 36 months for all qualified beneficiaries, whether they are covered under Federal COBRA or Mini-COBRA.
The cost of COBRA may be difficult for anyone to pay. While New York’s DFS successfully fought to lower overall premium increases for 2026, the scheduled expiration of the enhanced federal ACA subsidies remains a major financial threat. The state offers the NY State of Health Marketplace as an alternative. If you are an employee of the entertainment industry, the New York Continuation Assistance Demonstration Program can help you by paying 75% of your COBRA premium.
The Self-Employed Issue
If you are leaving your employer to become self-employed, the rules may be a bit different. First, the reason you are leaving must coincide with a qualifying event to be eligible for COBRA for any length of time. The key is that COBRA may be out of your price range if you are starting a business from the ground up. Therefore, you may choose to look into other insurance options, such as a less costly plan from the marketplace or even an alternative plan, like a catastrophic illness and injury plan.
You are never required to accept a COBRA or New York equivalent health insurance plan. However, for those that have the means, it is a great way to avoid a lapse in insurance coverage in between jobs or after a divorce.
Insurance When the Company Folds
COBRA Health Insurance in NY is designed to help a person maintain access to their group health insurance plan when they have a qualifying event. A qualifying event may be termination of employment, divorce, or loss of coverage. However, when a company goes out of business, resulting in your termination, there is no longer a group of insured individuals that are taking part in the company group insurance plan. Therefore, you are not eligible for COBRA benefits.
In New York, the state allows for people in this predicament to find comparable conversion options offered privately at no more than 102% of the group rate of your original plan. These conversion policies are offered through the insurer, ensuring coverage access even when the group plan dissolves.
When You No Longer Qualify for COBRA Health Insurance in New York
There are certain events that will occur that indicate you will no longer qualify for coverage under COBRA. First, if your 18 months or 36 months pass, you are no longer qualified to receive COBRA benefits. In addition, if, during your coverage period, you become eligible for Medicare, you will no longer qualify to receive COBRA coverage or New York health insurance coverage.
A more obvious reason you may no longer qualify for COBRA benefits in New York is if you become gainfully employed and are covered under your employer’s insurance. Once the employer insurance is offered to you, you may no longer receive COBRA health insurance benefits for you or your family. The good news is, you now have access to your new employer’s insurance plan which is likely less money than your COBRA benefits out of your pocket.
COBRA’s Value in the 2026 ACA Environment
With the scheduled expiration of the enhanced federal ACA subsidies in 2026, the choice between COBRA and the NY State of Health Marketplace is more complex than ever:
- The Subsidy Cliff: If your household income exceeds 400% of the Federal Poverty Level (FPL), the “subsidy cliff” returns. You will lose your entire subsidy, and the full cost of an unsubsidized Marketplace plan will likely be significantly higher than your COBRA premium.
- Reduced Subsidies: Even if your income is below 400% FPL, your subsidized premium on the Marketplace will increase because the original (less generous) subsidy formula returns. The national average increase in net premiums is over 114%.
- COBRA Advantage: COBRA offers premium stability (102% of the known group rate) and guarantees continued access to your current doctors and accumulated deductible status, making it the safer choice for individuals with ongoing medical needs or those above the FPL income limit.
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