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What You Need to Know About COBRA Insurance?

COBRA Insurance, COBRA, also known as ‘The Consolidated Omnibus Budget Reconciliation Act’ of 1985, is a federal law that ensures that a person’s health insurance coverage will continue for up to 18 months after the date of his or her termination. Most companies that offer group health insurance to their employees are subject to COBRA and certain situations can extend this deadline from 18 months to 29 months and even up to 36 months.

What is cobra insurance coverage?

Introduction of the cobra insurance act was one of the best things done by the US congress to help all the individuals who are covered under some insurance plans by private or government sectors. This cobra insurance act made it easy for the individuals and their family members to avail the benefits of their existing insurance plan even after the employee retires from the job.

This act will bring all the individuals, employees and their families under coverage of their insurance plan even after the retirement of the employee. This article will provide complete details about the cobra insurance coverage. Hence this article will be helpful to the people who want to know about what is cobra insurance and about its benefits.

Here are some more details about the cobra insurance coverage and its benefits to the people. They are.

  • This cobra insurance plan offers coverage to the beneficiaries for about 18 months only after the retirement of an employee or some other reasons like death, termination, dismissal, and resignation.
  • As per this cobra insurance act, even if the spouse has got a divorce from the employee, then he or she is eligible to get the benefits of the insurance plan up to 18 months.
  • In some rare cases, an insurance plan will be extended to the beneficiaries for about 36 months.
  • It will be a bit costly compared to the normal health insurance plan when this benefit is availed after the retirement or for any other reasons as discussed above.

These are some of the important things about the cobra insurance coverage and its benefits to the people who suddenly get affected by situations like employee’s retirement or death or losing job for some reasons. This is somewhat helpful to the people and it is a great move by the US Congress to implement this act in the country.

Who Benefits from COBRA?

COBRA insurance protects those who have lost their job against simultaneously losing their health insurance benefits. COBRA is a temporary measure that’s designed to help individuals through this potentially difficult time. Not every terminated employee qualifies for COBRA insurance, but all employers know whether these rules apply to their company and their employees.

The law enables a terminated employee to buy health insurance for himself (and his family if he had family coverage while employed) at the group rate even though that employee is technically no longer part of the group. The price of coverage is high and the former employee is responsible for paying 100% of the cost each month, plus a 2% surcharge.

COBRA kicks in when an eligible employee is terminated, laid-off or experiences some other type of change in his or her employment status (such as reduced hours, or divorce from or death of the eligible employee). COBRA continues according to the schedule above or until the terminated employee is covered by an individual health insurance plan or another group health insurance plan.

Employers are required by law to notify eligible former employees of their option to purchase health insurance through COBRA. Employers need to also specify the cost for this coverage. Those receiving this notification have up to 60 days to accept COBRA coverage.

Because COBRA basically extends a terminated employee’s health insurance for a period of 18 months, those who participate in COBRA need not worry about a change in their benefits. Coverage itself does not change; the only change is the person responsible for paying the monthly premium. All family members who were covered prior to termination remain covered during the course of COBRA as well. In fact, the only way that coverage will change is if the person’s former employer changes the health insurance plan it is offering to its current employees.

COBRA  Designed to be Temporary

The important thing to keep in mind about COBRA is that it is intended to be used as a temporary measure. It guarantees you won’t be without health insurance for 18 months, but once that period expires, you will find yourself without health insurance if you have not secured it otherwise, either from a new employer or by obtaining an individual health insurance plan. And, although it’s unpredictable, you never want to find yourself in a situation where you detect for the first time a serious medical condition (such as cancer) while covered under COBRA. Such a situation could cause you to become ‘uninsurable’ later on because you’ve since developed a pre-existing condition.

What is cobra insurance cost?

If you have an insurance policy for you and your family members then you are having good support when you are in need of financial assistance for your needs. It is common that most people usually face troubles due to their illness or get injured due to accidents or get affected by diseases.

However, people who do not have a health insurance policy will surely be going to face financial troubles unless they are rich. But for the poor people who cannot spend enough money, problems will make them undergo heavy pressure which really makes them to suffer. Hence it would be a nice idea to hold a health insurance policy which can help you to get away from problems.

Nowadays most people are having an insurance policy but some are still stepping back against these insurance policies as they are afraid to meet the terms and conditions of the health insurance policy. Even though it would be a great idea to get the insurance policy for yourself and for your family which is going to act as a saviour by providing you with the benefits of availing effective treatment for your health problems. However, it might not be possible to avail it after the retirement of an employee.

Today you can still avail the benefits of your insurance plan for a period of 18 months or up to 36 months (in some special cases). The reason is because of the revolutionary cobra insurance act introduced by the US congress in the country.

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