Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) which is a federal law that helps employees to maintain health care coverage during a time they would normally lose it do to a “qualifying life event.” This includes if you resigned from a job or must file for unemployment.
Health insurance being one of the most important things you should have for you and your family. Especially in the case of sudden accidents which could cost thousands of dollars in medical bill and additional expenses. Without the right type of health insurance or health insurance in general; you and your family may be responsible for an enormous amount of bills.
COBRA health insurance is a coverage that guarantees employees a right to keep group healthcare insurance up to 18 months during a time they would normally lose it when leaving their job. Generally, COBRA will cover employees who resign or terminated for any reason accept “gross misconduct.”
There is however one big difference in that while employees have a guaranteed right to have the same health care coverage they formerly had while employed. Payment for this insurance requires them to pay for it out of their own pocket. Previous employers have no requirements to subsidize the health coverage payments. Often employer will cover a substantial portion of premiums for health coverage, so it can be quite expensive to have COBRA coverage.
In addition; COBRA coverage may available to an employee’s family members. This can sometimes be for as long as 36 months. COBRA is not made available for individuals health care plans which have been purchased outside a group health plan through employers or associations. Also, when losing individual health care coverage; there are no COBRA laws requiring any extensions.
Finding yourself out of a job and suddenly losing your health insurance coverage can make your current situations much worse. Even more so if something happens to you or a family member. COBRA allows a way for employees to continue their health coverage if they are to quit or have lost their job. This is to help ensure you are not left without proper health care insurance protection.
If you are a qualified beneficiary, you are not enrolled in COBRA insurance automatically. There is a timeline the COBRA process will follow requiring each party to take action that fits in a specific timeframe. This typically will include the following deadlines.
Typically, you will pay your health insurance premiums and usually it is more expensive under COBRA insurance due to your employer not paying the portion of your premium that was paid while you were employed. This amount varies depending on your employer or situations but more often this is still much cheaper than going out and purchasing a individual health insurance plan. You should always compare costs and look at other options that may be available to you. For example, a spouse’s insurance, Health insurance marketplace, Medicaid, or military options.
While COBRA regulations and guidelines have set minimum duration, periods depending on whether it is for an employee or a qualifying beneficiary as well as the type of qualifying event. Employer health plans can or may provide you with a longer period of coverage that goes beyond the minimum periods required.
Employee’s spouse and dependents can continue when it’s after the date the employee becomes entitled to Medicare when less than an 18-month period prior to the event which may continue for 36 months.
Employees that are called to active duty or enter the military then COBRA continuation for this employee or qualifying beneficiaries is 24 months.
COBRA continuation – Qualified beneficiaries that are eligible for the 18-month period may qualify for extensions:
COBRA which is a federal law allowing you to stay with your employee health insurance for a limited time when your job end. Contact your employer to learn about what COBRA options are available or if you already signed up for COBRA coverage weather or not you may switch to a Marketplace health insurance plan.
Speak to a licensed agent today