Cobra Health Insurance Policies
COBRA Health Insurance Policies, when you qualify
, are a good stand in option for you in between employers and other situations. We will give an overview of COBRA, as well as how you can benefit from it.COBRA is named for the Consolidated Omnibus Budget Reduction Act, passed by the US Congress, and aimed to protect employees and their families in the case of adverse employment events, such as loss of a job. It allows you to buy back into the group insurance policy that your ex-employer was a part of, and they will continue paying the employer's group portion of your premium. There are a couple other circumstances where it applies as well. The Consolidated Omnibus Budget Reduction Act (COBRA) is a Federal program that allows a terminated employee to retain their insurance option with your employer's group insurance for a period of 18-30 months after termination. It is a nice cushion that can help families in a pinch when stuck with no job, but it is a temporary stop-gap solution.
There are specific triggers that establish eligibility. As of 2009, there are several circumstances. Please check with your local state government for variations to COBRA, as well as modifications and updates. Please consult with a professional before acting on this advice to make sure it fits your need. The most common trigger is you lose your job (and this can be for any reason except for gross misconduct.) The other reasons include becoming completely disabled due to injury or disease. You may also qualify if you get your hours reduced to the point that you no longer qualify for the group coverage with your current employer's provider. If you have children who are older, and they have reached the cutoff age, which was around 19 or 25 (the cutoff age has recently changed due to Mr. Obama's health reforms). Another circumstance where the family becomes eligible for COBRA is when a covered employee passes away, and you are a spouse or dependent of the employee.
COBRA requires you to elect a decision shortly after becoming terminated from your position. Your need to decide within 60 days of your employer giving you a statement of your rights following termination, or group coverage ends for you, whichever is later. However, there is a catch with the payment of premiums. Even if you wait 60 days to decide, and you take the 45 days allowed before you pay your first premium, you still have an obligation to pay retroactive monthly installments from the day your group coverage ended. This means if you waited 2 months and took the 45 days before your payment was due, you are responsible for 3 retroactive payments, in addition to your current month's payment. This is a total of 4 months' worth of insurance premiums.
However, COBRA is still a better option than buying temporary health insurance, since it covers preexisting conditions. Temporary health insurance is less expensive, but you can get in trouble if you have preexisting medical conditions- they are not obligated to over those for you. You can continue COBRA until you get an individual health policy, if needed.
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