You and Cobra...

Today we are living in changing times. Some who were employed are looking for other opportunities and may have been able to exit their previous position with their group health insurance benefits, thanks to the Consolidated Omnibus Budget Reconciliation Act better known as COBRA.

COBRA provides the continuation of group health insurance coverage for workers and their families when they become unemployed. COBRA applies to employers with at least 20 employees and can provide security for these families. COBRA can continue for 18 to 36 months, depending upon your individual situation. However, if you are fired because of misconduct - all bets are off.

The problem with COBRA is that it is typically very expensive. When you were employed the employer paid a portion of the premium lowering you (the employee) cost. When no longer employed, you (the employee) becomes responsible for paying the entire monthly premium. Ouch!

Some interesting COBRA facts…

1. The U.S. Department of Labor has jurisdiction over COBRA concerns.

2. Under COBRA you have the same rights during the Open Enrollment period as the current active employees.

3. If your former employer cancels that group policy or goes out of business then there would be no health plan so the COBRA goes away.

4. If you relocate to another area and it is not in the plan’s geographic coverage area then you can lose your COBRA benefits.

5. If you have Social Security disability, you may be entitled to 29 months of coverage.

6. If you want to continue your Group Benefits, you must apply within 60 days following your date of termination, however, your COBRA coverage is retroactive to the date of termination even if you apply on day 60.

7. You must pay your monthly premium amount, plus any administrative fees (typically 2%).

8. COBRA prevents a gap in your coverage in case you are diagnosed with a catastrophic illness.

9. Some states have laws that grant more rights in determining COBRA eligibility, your plan admin. should be apprised or aware of the state’s rights.

10. If you are eligible for Medicare, get divorced or if you die your spouse and dependent children are entitled to 36 months of continued coverage.