When you lose your job or leave voluntarily, you may be at a loss as to what to do when it comes to handling your health insurance. If you want to keep your same group health insurance plan, you can choose to do so through the COBRA continuation coverage medical plan.
What Is COBRA?
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a government program that was set up in 1986 so that individuals could stay on their group health insurance plans after they lose their jobs. Before this program was created, individuals who lost their jobs also immediately lost their health insurance coverage. With this plan, a former employee can simply elect to stay on his existing health insurance plan on a temporary basis until he gets another job or individual health insurance.
Duration
The COBRA plan is only meant to be a short-term solution if you're no longer employed. The ultimate goal of this plan is to help you transition into another job, where you can get on a different group health insurance plan. You can usually get this type of coverage for up to 18 months after you lose your jobs. In certain cases, individuals with disabilities can get an extra 11 months of coverage.
Payment
When a former employee elects to get on COBRA coverage, she has to pay for the insurance premium out of her own pocket. This requires the employee to work in conjunction with her former employer to pay the premium. Generally, the employer continues with the group premium plan, and the former employee pays the employer for her part. This is usually more expensive than what the employee was used to paying because the employer no longer pays any part of her premium for her.
Who Qualifies for COBRA?
COBRA is available to the majority of people in the workforce. For companies that have more than 20 employees, COBRA is usually available for their employees. When a worker loses his job, his family members and other beneficiaries can also continue to receive group health insurance benefits through this plan. The beneficiary has to have been covered under the medical plan the day before the regular employment arrangement was altered to receive benefits under COBRA.
Tags: health insurance, group health, group health insurance, former employee, health insurance plan, insurance plan
