COBRA Health Insurance

COBRA health insurance – such a catchy phrase, but nonetheless vague to those who are not American. A lot of people, especially employees, are very interested to know what COBRA is. If you’re one of them, then this article is written just for you. The following talks about COBRA health insurance and gives you a fair idea of what it is, how it works, how expensive it is, and more information.

What is COBRA?
Federal regulations oblige employers with more than 20 employees working for them full time to provide continuation health insurance coverage, even after the worker has been laid off. The continuation period of the company medical insurance will last anywhere between 18 to 36 months. This is very advantageous for workers, because it gives them a slack of paying for their insurance, in the unfortunate event that they should get fired from work. In the more unfortunate event that they should contract a disease, the insurance will pay for their medical bills.

Up until recent times COBRA premiums were subsidized by the company. However, effective as of June 1, 2010, a new federal regulation states that the employees must be the ones to pay the full cost of their COBRA premiums, with an added 2% administration fee.

How expensive is COBRA?
A regular COBRA policy is estimated to cost about $1,100 monthly, for families with relatively large medical needs. For instance, a family averaging around $400 of monthly medical expenses is more likely to have higher COBRA premium rates. By the same token, a family with very little need for medical attention can save a lot in their COBRA premiums.

For someone who was laid off, and is currently in between jobs, the $1,100 a month is an outrageous number. The fact that they already struggle in paying their mortgage or rent is statement enough that they need help. If you’re thinking of getting COBRA premium insurance, you need to accept the possibility of future unemployment. At the same time, you also need to consider the potentially grave consequences of not having insurance when you need it the most.

Applying for COBRA
Upon approval, you have 60 days to wait for the notification that you are accepted for coverage. It would take at least 45 days before you are required to make the first payment, though. If you already have COBRA insurance and was very recently laid off, it’s best to check with your previous boss regarding the continuation of your insurance. This is the responsibility of your old boss, so you have to fight for your right to get this, at the very least.

Note that a previous administrator has the responsibility to notify you about your continuation benefits 44 days after you were laid off. Failing that, the administrator will be subject to oversight and ignorance laws of the state. If you are working for an employer with more than 100 employees, you can also try the WARN, or Worker Adjustment and Retraining Notification Act, which was first released in 1988. Try reading the finalized regulations made in 1999 to get a fair idea about coverage involving underpayment claims before enrollment, part-time employment, relocating, successor employers, and more. You can also get a few insights from the Family Medical Leave Act and other federal regulations governing COBRA insurance.

Qualifying for COBRA
Many people say that qualifying for COBRA premiums is difficult. It’s not entirely so. The following are some of the qualifications of COBRA. You decide on how difficult they are:

  • Parent losing health insurance
  • Dependent who just turned 26
  • Have become disabled or partially disabled and unable to go to work
  • 65 year old worker signing up for Medicare
  • Reduction in hours of employment
  • Divorce or other legal financial change of circumstances
  • Death of marriage partner

Keep in mind that not all of these conditions have to be met. The given qualifications are kept on an “or-clause” so you just have to qualify for one to qualify for COBRA.

Who doesn’t qualify?
There is a selected group of people who are not qualified for COBRA premium; they are as follows:

  • Church related institutions and organizations
  • Terminated because of lascivious misconduct
  • Discharged by an employer going in bankruptcy

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