There are, unfortunately, some misconceptions regarding COBRA and its rules. To begin with, COBRA is not a type of health insurance, but a law regarding health insurance coverage. COBRA health insurance, then, is addressing the rules regarding the health insurance coverage under your (previous) employer.
When you have been laid off or leave your current employment, you may be eligible for continued coverage under the COBRA rules. The rules state that the company is required to offer you the option to pay for the extension of your health insurance for at least 18 months. COBRA is an acronym that stands for Consolidated Omnibus Budget Reconciliation Act, and was put into law in 1986.
If you are laid off, your employer has to let you know in writing about your rights under COBRA. This includes the fact that you have 60 days from the notice date or the date your insurance ended to sign up for the coverage. The one exception is if the company you worked for went out of business or bankrupt – in that case COBRA is not be available to you.
Signing up for a COBRA health insurance extension means that you will have similar health insurance and the same basic health plan benefits that you enjoyed during your employment. The downside is that you will have to pay the entire health insurance premium that you previously only paid a portion of. Before, your employer paid the majority (in most cases) of that monthly fee. Now you will be responsible for the entire monthly premium and it can be very expensive.
Depending on your particular situation, you may not be able to afford the monthly premium as it can end up being 60-70% of your monthly unemployment check. There are many workers that have been laid off that cannot take advantage of COBRA health insurance coverage extension because of the cost.
If this happens to be the case for you, there might be other health insurance options that you can utilize for you and your family. As an example, if you and your family are healthy, then you should be able to find a high deductible health plan. The good news is that you have 60 days to make a decision about taking the COBRA health insurance extension, so you have a little time to do some research online or make an appointment with your insurance broker to learn about options.
You can get more information regarding COBRA health insurance rules and regulation from the U.S. Department of Labor website or by calling 866-444-3272. There is a FAQ page there that lists the latest update and has plenty of helpful information regarding COBRA.
Yuma Insurance – Steve Meinhardt
