COBRA INSURANCE AND ITS BENEFITS

When an individual purchases a health insurance policy they believe that all of their essential medical needs will be covered by the insurance coverage. Here comes COBRA insurance that stands for Consolidated Omnibus Budget Reconciliation Act of 1985 that allows an employee to keep their insurance active even after the completion of their employment.

All about COBRA health coverage and its benefits:

COBRA is a law that is passed by the United States Congress. As per this law, a health insurance policy must provide notice to employees that they are still eligible for the benefits even after losing their job. Afterward, an employee has a time of 60 days to either continue their COBRA coverage, or they will not be able to enjoy their benefits. Once an employee agrees to continue with COBRA benefits they need to pay for the COBRA coverage.

There are also other reasons in which an employee may still qualify for the COBRA health coverage. These reasons may vary from losing health coverage due to sudden demise of a covered spouse, or legally separated, loss of child’s dependent status, or working for less number of hours due to slowdown of business operations, or due to medical leaves. However, losing a job due to “gross misconduct” is not a qualifying event for COBRA health insurance.

In simple words, if you think you fall under any of these qualifying events then you just need to pay 100% of the premiums of the small amount of fee. Many people like COBRA health insurance because it’s a great way to ensure that you are still medically covered despite your current employment status. In some cases, federal law allows you to pay for COBRA health insurance for 18 months from the time of loss of employment. However, for some events, it allows you to enjoy the benefits of insurance for up to 36 months.

Premiums of COBRA health coverage:

During the continuation of the job, the employer of the company needs to pay a fixed cost, and the employee needs to pay the remaining costs. While after employment, the employee needs to pay the complete premium with 2% of additional admin charges. However, these costs must not exceed more than 102% of the costs of the insurance plan. Therefore, the premiums of COBRA health insurance may be higher than prior insurance costs. In a nutshell, the costs of COBRA insurance remain the same with no payment from the employer side.

Please check out the list where early termination of COBRA insurance is possible:

1) In case of failing to pay the costs related to COBRA insurance on time.

2) In case of failing to maintain the group health plan.

3 )Any employee involved in fraud is not eligible for COBRA insurance benefits.

The bottom line:

COBRA is the best health insurance option that needs to be retained even if you lose your employment. However, some people avoid taking these plans just because of high costs, or the plan does not fit the individual’s needs or family needs.