COBRA Health Insurance Coverage

Is COBRA Health Insurance something that you should be considering? A friend's brother lost his job and decided to go without health insurance until he found another job with health benefits. The main reason was that it was too expensive, and he hadn't been to the doctor in about 2 years anyway. He figured he could go for some time without it and maybe he is right. But it could also end up being a very costly mistake. I have read horror stories of people who developed serious illnesses only to be denied certain coverages with their current insurance plans. So I can just imagine how difficult it would be to get new coverage with a pre-existing condition. To prevent any break in coverage, one should really consider transitional coverage known as COBRA.

COBRA gives workers and their families who lose their health benefits due to certain qualifying events the right to chose to continue group health benefits for a limited period of time, generally 18 months. Some of the events that could cause the loss of benefits and entitle you to COBRA coverage are voluntary or involuntary job loss (for reasons other than gross misconduct), reduction in work hours, death or divorce. You must have been enrolled in the employer's health plan at the time of the event that caused loss of benefits.

When you are no longer entitled to benefits, your employer is required to notify you of your right to elect COBRA coverage. They must also notify the plan administrator and you should receive notice from them informing you of your options. You must respond to them by a specified period of time, or you will lose your rights to COBRA benefits. You must be offered the same type of coverage that is available to eligible employees and generally the same coverage you had prior to the event that caused loss of health benefits.

You will most likely be required to pay the entire cost of the plan (up to 102%, 2% for administrative costs). This can be costly as you will now be paying the portion that your employer had paid for you. However, you are still paying group rates which in many cases is cheaper than buying an individual policy. There is always the possibility of unexpected illnesses, hospitalization or surgeries that would undoubtedly be more expensive than the premium you would pay for COBRA coverage. You should definitely shop for a policy that fits your particular situation, because it is possible that you would find something cheaper. But it's good to know that you have the Cobra option and can insure that there is no lapse in your coverage.

For more information regarding COBRA and some FAQ's visit www.dol.gov/dol/topic/health-plans/cobra.htm.