Often when you work for an employer, they provide you with healthcare benefits. These benefits are extended to you for as long as you are gainfully employed. But what happens if you’re seeking medical treatment for an illness or injury and you suddenly lose your job? Do you stop your course of treatment because your benefits will cease or do you pay for everything out-of-pocket? In this case, you should know you can elect for COBRA health insurance.
What is COBRA?
COBRA or Consolidated Omnibus Budget Reconciliation Act was passed by Congress in 1986. In it there is a provision which states that, if you are suddenly terminated or separated from your job, you have the right to continue your employer’s group health coverage. Anyone, who involuntarily or voluntarily loses their job or has their hours drastically reduced is eligible for COBRA.
Not everyone stands to benefit from accepting COBRA health insurance coverage. For an individual, electing to take COBRA can be prohibitively expensive because your former employer is no longer required to pay their share of the premium. Often, an individual, especially someone in good health, is better off electing for short-term coverage.
COBRA health insurance is more suitable for families where medical expenses would far outstrip the cost of COBRA if the family were to otherwise go uninsured.
COBRA Coverage and Duration
Upon officially leaving your job, your former employer has to inform you in person or within 14 days by post, that you are eligible for COBRA health insurance coverage. Thereafter, the employee has 60 days to decide if they want to accept COBRA coverage. If they do elect to accept it, they have 45 days to submit their first payment.
COBRA health insurance coverage will typically last for up to 18 months, however, if the person is disabled, they can extend their coverage for up to an additional 11 months. You should also know that the American Recovery and Reinvestment Act of 2009 provides an employer-subsidy up to 65% for as long as nine months for certain qualified laid-off employees.
Filing for COBRA
Once you leave your job, you will be provided will all the pertinent details and instructions on how to apply for COBRA health insurance coverage. The employer must supply you with clearly-written procedures for filing for COBRA benefits and claims. Your former employer-s plan administrator will serve as your point-of-contact for any COBRA-related questions or concerns you may have.
COBRA health insurance coverage certainly isn’t for everyone. If you are an individual recently unemployed and you are in good health, you may want to elect for a short-term insurance policy. If you are interested in pursuing such a policy, InsuranceUSA.com has a wealth of useful information and can even provide you with a free quote.