Here’s What You Should Know About COBRA Insurance
Thanks to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), you don’t have to lose the health insurance that was provided by your former employer. But you’ll have to pay full price as well as an up-to-two percent administration fee.
Who Is Covered by COBRA Insurance?
To qualify for COBRA you must have lost your employer-provided insurance because:
- You were fired (unless you were terminated due to “gross misconduct.”)
- You quit your job.
- You no longer qualify for employer-sponsored coverage because your hours were reduced.
Dependents can also use COBRA if they lose eligibility due to:
- A child dependent turns 26 and is no longer eligible for covered on a parent’s plan.
- The covered employee died.
- The covered spouse divorces or legally separates.
- The covered employee becomes eligible for Medicare.
Overview of COBRA Details
The COBRA legislation only applies to private sector and state and local governments with a minimum of 20 employees, although some states also have abbreviated versions of COBRA insurance for employees from companies with fewer than 20.
COBRA coverage can last for up to 18 months, and sometimes up to three years if the reasons for loss of employment-based coverage are different than the standard criteria of loss of job or hours. You can cancel COBRA coverage at any time.
Once an employer notifies COBRA that you no longer qualify for employer-provided insurance (within 30 days of the event), you have roughly 60 days to notify COBRA if your eligibility is due to divorce, legal separation or a dependent child has reached the age of 26.
The health plan you are losing has 14 days to provide you information about how to apply for COBRA. You then have 60 days to decide to do so. The dependent spouse and children can elect COBRA whether or not you do.
You Have Other Options
If you don’t want COBRA insurance, you can take a different path to health coverage.
- Buy a plan through an agent or broker.
- Get Affordable Care Act coverage, with supplemental assistance if you qualify.
- Buy a short-term policy.
- Wait until you get another job that offers insurance.
- Do some research and find a policy that fits your needs and budget online.
EINSURANCE offers a quick and easy way to compare policiesfrom different insurance providers.