COBRA stands for Consolidated Omnibus Budget Reconciliation Act, which is a health insurance program that allows employees to continue receiving health care benefits even after losing their job or other extenuating circumstances. COBRA can be expensive, but it can also help you maintain your benefits while looking for a new job.
With COBRA, you can continue to receive health care benefits provided by your employer even after you lose your job due to layoff, death in the family, divorce, job transition, one job to another, etc. for a temporary period. COBRA health insurance coverage is not a permanent solution but is intended to help those in need for 18 or 36 months.
What is COBRA insurance?
COBRA insurance coverage is a temporary benefit enshrined in legislation by the federal government in instances where an employee may need health insurance to extend beyond their voluntary or involuntary termination.
This is not a permanent solution, but it can serve as an aid to those who are eligible, which normally refers to employees who previously received health care benefits from their employer but need to continue to receive these. benefits after leaving that employer. They can apply for COBRA health insurance to bridge the gap between jobs or if they encounter life circumstances such as death or divorce or any other event that would deem them eligible.
How to Get COBRA Health Insurance
While COBRA itself is an act intended to change previous laws regarding health care and certain employer benefits, COBRA health insurance is a general term used to describe this form of assistance. Depending on the scenario and the claimant’s (former) employer, the duration of COBRA insurance coverage can be 18 months or 36 months.
Those eligible to apply for COBRA coverage include employees who:
- quit their job voluntarily or involuntarily
- have experienced reduced hours that no longer qualify them for employer-provided health insurance coverage
- have suffered the death of a covered spouse or a divorce with the covered spouse
- have lost their jobs due to the COVID-19 pandemic
These are the broad outlines with which eligibility is painted with respect to COBRA health insurance – other situations may apply, specific to each case.
In addition to requesting assistance under COBRA, you can also contact your employer’s human resources department to find a solution for reduced or lost medical coverage. Under the Affordable Care Act, the employee in need of health insurance may be able to find a cheaper solution with less red tape, and that’s part of the job of an effective human resources department. to know this information in order to be able to provide it to employees.
If your employer also has an insurance service, it would be wise to discuss your healthcare options with them if you find yourself in a situation where your employer-provided healthcare is coming to an end for any reason. Be aware that your employer, even if they agree to continue your health care plan under COBRA, can still choose to adjust or discontinue their employees’ health care benefits at any time.
Take advantage of COBRA insurance
COBRA health insurance coverage may be a viable option if you like your current health insurance plan and your employer cuts your hours, excluding you from company health insurance benefits. However, this can be quite expensive.
When an employer provides insurance, they get what is called a group rate for their employees. This rate reduction is not so much a group discount as the cost that an employer can pay without any kind of penalty to the health insurance company with which he has a contract. In typical cases, the employer will pay about 80% of the premium for each of its qualified employees, which is a substantial percentage, leaving the beneficiaries of the health care plan to pay about 20% of the premium. This is just one example of how office health insurance can be structured, but it is very common.
If you are considering COBRA coverage as an option between employment or whatever your situation, you should be aware that in most cases the recipient of COBRA assistance must pay 100% of the premium for the time they receive assistance. Individuals (and their families) who qualify for COBRA may be required to pay slightly more in premium for the health plan they are suing, up to 102%. Although COBRA may be available to you, chances are you will find a more affordable alternative to be covered.
COBRA Alternatives
The average person will pay between $400 and $700 per month for COBRA coverage, which is unaffordable for most people. However, COBRA alternatives exist for more affordable health insurance options, including the following.
- Medicare: If you are a US citizen over the age of 65, this automatically qualifies you for Medicare. If you or your spouse have paid taxes to Medicare for 10 years, you may also qualify for a waiver of all future monthly premiums if you apply for Medicare Part A and Part B. You may also qualify for Medicare if you have less age 65 but living with a disability.
- Medicaid: If you are under 65 and not disabled, but fall into the low-income category, you can apply for Medicaid. If your financial resources prevent you from paying for health care (and by extension the COBRA premium), then this choice could be your solution. Eligibility varies from state to state, and several other categorizations may be listed in addition to being low-income.
- Marketplace: You also have the option to explore the General Health Insurance Marketplace, which is a forum where people can browse healthcare plans that may work for them, especially those made available under of the Affordable Care Act. Although some states run their own market, the federal market can be found on HealthCare.gov.
- Cash payment: Many doctors’ offices and hospitals offer steep discounts if patients offer to pay for their procedures, exams, or tests in cash upfront rather than using their insurance. In fact, you might be able to save a significant percentage by paying cash, paying only a fraction of what your bill would be through insurance. If you can afford it, you may want to ask your medical provider if discounts are available for those who pay cash.
- Cooperative: A health care cooperative is a member-governed and funded group of providers and patients. Therefore, the insurance belongs both to the doctors and to the members who receive services from the doctors. They pay a membership to get these benefits. Not only do co-ops bypass large healthcare corporations, but they can also be extremely financially feasible and more reliable than other healthcare options, depending on where you live.
Compare health insurance providers
If you’ve lost your health insurance, you have options to get the coverage you and your family need. Benzinga offers reviews and information on the following health insurance providers. You might want to consider starting your search for coverage with the following articles.
Are you eligible for COBRA?
While you may qualify for COBRA coverage after quitting your job or having your hours reduced, you may find that this insurance is too expensive for you to comfortably afford because you pay 100% of your premiums. However, the cost doesn’t mean you have to live without health insurance. If you don’t qualify for a federally subsidized health care program, you may want to explore market plans or short-term health insurance options until you can purchase another form of health care. employer-sponsored coverage.