What is Cobra, and how is it related to my health insurance policy? Cobra is continuation health care coverage for group coverage that is available under certain circumstances when the coverage would otherwise be terminated for certain reasons. Only qualifying events are eligible for Cobra coverage, and some of these events include a reduction of hours, lay offs, and voluntary or involuntary termination, as long as the termination was not for gross misconduct. The qualifying event will determine who is eligible for coverage continuation and the amount of time the coverage can be continued.
Cobra health insurance coverage is intended so that people who lose their job or have hours reduced can continue with the health insurance for a limited time. The premiums for Cobra coverage are due within forty five days of the decision to continue the health insurance coverage. You may not receive a notice of the monthly premium due, because neither your employer or the health insurance company have a responsibility to remind you when the amount is due, so make sure you know when you premiums are due each month. Cobra coverage can be expensive, because normally the employer would cover a share of the health insurance premiums, but with Cobra coverage you are responsible for the entire premium costs. This means you may end up paying more than double what you were paying to continue your health insurance.
Cobra continuation may cost significantly more than finding a private health insurance policy, depending on your medical condition as well as the conditions of all your dependents. If you, and your dependents if you have them, are relatively healthy with no medical conditions, then it may be cheaper to choose a private health insurance plan. Proof of prior coverage can help lower the costs, because you can prove you had health insurance up until this point. If you or any of your dependents have medical conditions which require frequent doctor visits or prescriptions, as well as routine diagnostic tests, then Cobra continuation may be the best route. This is because of the medical conditions involved. Evaluating these factors may allow you to see significant savings on your health insurance premiums.
The time period during which you can qualify for Cobra health insurance continuation under your employer varies, depending on the specific qualifying event. For employment termination or reduction in hours, the time limit is generally eighteen months for you and any dependents that you have. Certain disabilities may make a person eligible for an eleven month extension, bringing the time limit to twenty nine months, if certain factors are met. For this health insurance continuation you must receive a formal determination of disability from the Social Security Administration. A change of family status, such as a divorce or other qualifying event, may make dependents eligible for thirty six months of Cobra continuation.
Understanding Cobra benefits and the time limits can help you evaluate your health insurance needs and options. Some employees and dependents may find lower health insurance premiums through Cobra, but others may find that switching to a private health insurance policy offers better savings.
