All About COBRA Health Insurance

November 25, 2020 17:50 newlambertagency

COBRA health insurance or Consolidated Omnibus Budget Reconciliation Act (COBRA) is an insurance program that gives workers and their families who lose their health benefits the right to choose to continue the health benefits.

Created in 1985, COBRA allows individuals who experience a job loss or other qualifying event the option to continue their current health insurance coverage for a limited amount of time.

It is generally provided by employers outside the federal government with more than 20 employees.

How do you qualify for COBRA health insurance?

You can avail COBRA benefits only in certain situations that are called ‘qualifying events’.

You’re eligible for COBRA if,

  1. You were employed and covered under an employer’s group health plan.
  2. You were laid off, fired, retired, or quit, or had your work hours cut to the point that your employer is no longer required to cover you under a group health plan.

As a dependent,

  1. If you are a dependent of someone who qualifies for COBRA based on the above, you may be eligible, too.
  2. If you are a spouse who divorces or files for legal separation from the employee, you may qualify.
  3. A spouse of an employee who dies may also get COBRA coverage.

How does it work?

As already mentioned, COBRA insurance extends your health plan coverage when an employer’s plan ends.

Your insurance carrier is required to include COBRA rights information in your plan documents when you initially enroll. Your employer, your insurance carrier, or both will give you information on COBRA coverage.

After your insurance benefits end due to any of the reasons mentioned earlier, you will have 60 days to decide whether you want to continue your health coverage under COBRA. If you don’t approve it, your health coverage will end on the day that your employer’s plan coverage ended.

If you elect to continue coverage under COBRA, it will start the day after your employer’s plan coverage ends. The COBRA continuation coverage will offer the same benefits you had under your employer’s group plan. This means that you can see the same providers and follow all existing plan details.

COBRA coverage may last for 18 or 36 months depending on the type of qualifying event that made you eligible in the first place.

The coverage may be terminated if you don’t pay your premiums or other fees for coverage. It can also be terminated if you get a new job that offers health insurance coverage.

COBRA can be extremely beneficial for you as it covers the same benefits your employer’s health plan covered you for. However, it does not cover supplemental coverage, such as disability, life insurance, hospital care insurance, or other types of voluntary coverage