dol.gov/agencies/ebsa

EMPLOYEE BENEF

ITS SECURITY ADMINISTRATION

UNITED STATES DEPARTMENT OF LABOR

FACT

SHEET

The Department of Labor’s Employee Benefits Security Administration (EBSA) administers the Employee

Retirement Income Security Act of 1974 (ERISA), which governs retirement plans (including profit

sharing and 401(k) plans) and welfare plans (including health, disability, and life insurance plans). ERISA

also includes the health coverage continuation and portability provisions of the Consolidated Omnibus

Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA),

as well as protections added by the Affordable Care Act (ACA). This fact sheet focuses on job loss, its

effect on workers’ health benefits and retirement benefits, and how these laws impact workers’ rights.

When facing job loss or a reduction in hours, you need to know your options ahead of time to prevent

loss of health coverage. There may be several options available to individuals who are losing their health

coverage when they lose their jobs:

In addition, under the ACA, a group health plan cannot deny coverage to an individual due to a

preexisting condition. A plan generally cannot limit or deny benefits relating to a health condition that was

present before your enrollment date in the plan.

offer a group health plan, COBRA continuation coverage may be available. COBRA, which generally

applies to employers with 20 or more employees, allows the individual and his/her family to continue the

same group health coverage at group rates. The cost for coverage may be higher than what the

individual was paying before because former employees usually pay the entire premium, that is, the

premium active employees pay plus the amount of the contribution made by the employer. In addition,

there may be a 2 percent administrative fee. The cost for COBRA coverage is usually higher than the

The plan should send a notice regarding the availability of COBRA coverage. After this notice is

provided, you generally have 60 days to elect coverage. COBRA begins the day health care coverage

ended and lasts up to 18 months (and longer in some cases). Note: Once an individual has elected

COBRA, he/she won’t be eligible for special enrollment in another group health plan, such as a spouse’s

plan, until all COBRA coverage available is exhausted.

credit that will lower your monthly premiums and cost-sharing reductions that will lower your out-of-

pocket costs for deductibles, coinsurance, and copayments. Losing your job-based health coverage is a

special enrollment event which allows you to enroll in a Marketplace plan outside of the open enrollment

period. To qualify for special enrollment, you must select a plan either within 60 days before losing your

job-based coverage or within 60 days after losing your job-based coverage. The date your coverage will

start depends on when you select a plan. A Marketplace plan, like a group health plan, cannot deny

coverage due to a pre-existing condition. Information on Marketplace coverage is available at

also can find out if you and your family qualify for free or low-cost coverage from Medicaid and/or the

oversight of your retirement plan. It also provides you with rights and responsibilities, including specific

rights to plan information. If you lose your job, make sure you have a copy of your plan’s current

Summary Plan Description (SPD) and your individual benefit statement. If not, request a copy. The SPD

tells you if and when you can collect your benefits or how to roll over your 401(k) account to a new

employer’s plan or to an IRA (if your old plan permits you to do so). The individual benefit statement lets

you monitor your account balance and is an important statement to keep on file. If your retirement

savings remain in your former employer’s plan, keep current on any changes the company makes,

including changes of address, employer name, or mergers and give the plan any changes to your contact

information. If your benefits are in a traditional pension plan and your plan ends without enough money to

dol.gov/agencies/ebsa

Retirement and Health Care Coverage…Questions and Answers for Dislocated Workers

An Employee's Guide to Health Benefits under COBRA

What You Should Know About Your Retirement Plan

They are available on EBSA’s Web site or by calling toll-free 1-866-444-3272 to request copies. If you

have questions about these options, you can contact one of our Benefits Advisors electronically at

askebsa.dol.gov or by calling 1-866-444-3272.

For more information on the Pension Benefit Guaranty Corporation, visit pbgc.gov or call 1-800-400-

7242.