If a company goes out of business, are former employees still eligible for Cobra?

If a company goes out of business, its former employees may still be eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation coverage if the company had 20 or more employees and offered health insurance benefits before closing. COBRA allows employees and their dependents to continue their health insurance coverage for a limited time after leaving a job or experiencing certain other qualifying events. Under COBRA, individuals can keep the same health insurance coverage they had while employed, but they are responsible for paying the full premium cost plus a small administrative fee. If the company goes out of business and the group health plan is terminated, then COBRA coverage would no longer be available. However, in some cases, the company may have arranged for another insurance provider to take over the plan and provide COBRA continuation coverage. In such cases, the former employees would receive a COBRA election notice from the new insurance provider explaining their options for continuation coverage. If you are a former employee of a company that has gone out of business and you are unsure about your eligibility for COBRA continuation coverage, you should contact the company's HR department or the insurance provider that administered the group health plan to obtain more information.