Insurance flawed?

June 15, 2006 7:33 PM

If the (small) company I work for goes bankrupt, am I still eligible for COBRA, or is COBRA predicated on the continued existence of the company? I live in California.
posted by Sinner to Work & Money (6 answers total)

Response by poster: Scratch that.
posted by Sinner at 7:39 PM on June 15, 2006

Response by poster: Sorry ... I don't know why I didn't look harder. It's been a bad day. Please delete this.
posted by Sinner at 7:41 PM on June 15, 2006

No need to delete it - somebody might be looking for an answer to the exact same question some day! :)
posted by antifuse at 2:15 AM on June 16, 2006

For those not willing to wade through the thread -- yes, the coverage is predicated on the continuing existence of the company, or more accuratly, the group plan the company negotiated.

COBRA allows an employee who left a company to continue using the company's group health plan, so long as they pay the premiums. If something happens that makes the plan go away, there's no coverage.

I had this happen two jobs ago when that company went out of business. No more group plan, thus, no group plan to continue with. It's one of the bigger holes in COBRA.
posted by eriko at 4:46 AM on June 16, 2006

And just another note - COBRA only applies for companies with 20 or more employees. If you're in a really small company, COBRA might not be an option. Some states have COBRA gap legislation which looks like COBRA but is for groups of 2-19. I'm not sure if CA is one of them.
posted by MarkAnd at 6:42 AM on June 16, 2006

By the way, the Google Answers answer to the COBRA was correct in the case of the closure of a company, but wasn't necessarily correct when it comes to an acquisition. Depending on whether it's a stock or asset sale, there are instances where the acquiring employer takes on the COBRA participants.
posted by MarkAnd at 6:47 AM on June 16, 2006