COBRA Insurance Basics: Automotive Insurance Collisions and Health Insurance Quotes Medicare

COBRA Insurance Basics

Overview”COBRA” stands for the Consolidated Omnibus Budget Reconciliation Act. It’s not a health insurance plan, it’s a law created to protect you and your family in the event that you lose your employer-sponsored health benefits.If you qualify for COBRA coverage, you have the option of continuing your employer-sponsored health plan for a limited time. COBRA coverage requires three things: 1) that your employer is obligated to provide COBRA coverage, 2) that you are a Qualified Beneficiary

COBRA Insurance Basics

“COBRA” stands for the Consolidated Omnibus Budget Reconciliation Act. It’s not a health insurance plan, it’s a law created to protect you and your family in the event that you lose your employer-sponsored health benefits.

If you qualify for COBRA coverage, you have the option of continuing your employer-sponsored health plan for a limited time. COBRA coverage requires three things: 1) that your employer is obligated to provide COBRA coverage, 2) that you are a Qualified Beneficiary, and 3) that a Qualifying Event has occurred.

COBRA Costs vs. Group Plan Costs

COBRA benefits can be costly. Unlike group health insurance plans, for which your employer usually pays some or all of the premium payments, with COBRA benefits you’re usually required to pay up to the entire premium on your own, plus a 2 percent administration fee. If you extend the term of your COBRA coverage due to disability, you may be required to pay up to 150 percent of the premium.

To maintain COBRA coverage, you must pay your premiums on time. Your first premium is due 45 days after you choose COBRA benefits. After that, you’re allowed to pay monthly, although some plans permit other payment terms.

You can expect your first premium to be higher than subsequent premiums because it usually takes a month or more between the date you become eligible for COBRA and the date you decide to continue your benefits under COBRA. For example, if you leave your employer on January 1st and decide to get COBRA coverage on February 1st, you will be charged for both January and February.

You may not receive a monthly statement for your COBRA coverage, but you are still responsible for making your payments on time.

Employer Requirements

Employers are obligated to offer COBRA coverage if they:

Offer a group health insurance plan Have at least 20 employees

Federal employees do not qualify for COBRA. They are protected under a different law. If you’re a Federal employee and you leave your job, contact your personnel office to learn more about continuing your health insurance benefits.

Qualified Beneficiaries

You’re eligible for COBRA coverage only if you were a participant in your employer’s health plan before the “Qualifying Event” occurred.

COBRA coverage is available to employees, employees’ spouses, employees’ dependents, and in certain cases, retired employees and their spouses and dependents. If you’re expecting to give birth or are planning to adopt a child while you’re receiving COBRA benefits, then that child will also qualify as a beneficiary.

You can choose COBRA coverage for yourself and your family, for yourself only, or for your family only.

Qualifying Events

A “Qualifying Event” refers to leaving your job or another event that makes you eligible for COBRA benefits. The chart below outlines the circumstances under which you and your dependents can continue your health insurance coverage under COBRA:

Qualifying Events for COBRA

Employee

Leaving your job voluntarily, including retirement Reducing your work hours, resulting in loss of eligibility for health benefits under your employer’s policy Leaving your job involuntarily for reasons other than gross misconduct (e.g., layoff)

Employee’s Spouse

Reduction in the employee’s work hours Loss of the employee’s job for any reason other than gross misconduct The employee becomes entitled to Medicare Divorce or legal separation from the employee Death of the employee

Dependent Children

Reduction in the employee’s work hours Loss of the employee’s job for any reason other than gross misconduct Loss of “Dependent Child” status under the employer health plan’s rules The employee becomes entitled to Medicare Divorce or legal separation of dependent child’s parents Death of the employee

Non-Qualifying Events

Qualifying Events for COBRA are those that affect your employment status. Changes in the type of health insurance plan offered by your employer are not Qualifying Events. For example, if you remain fully employed, but your employer reduces, changes, or cancels its health insurance plan, you do not qualify for COBRA coverage.

COBRA Coverage

Health insurance coverage under COBRA must be identical to the coverage your employer offers its current employees. This means that you should get the same coverage as you did before as an employee after your employment ends or another Qualifying Event occurs.

Under COBRA, you are entitled to no more than the same benefits as current employees have. This means that if your employer cancels its health insurance plan, you will no longer be entitled to COBRA benefits. If your employer reduces coverage to current employees, your coverage will also be reduced.

To find out more about COBRA, visit enetinsurance.com.  eNet provides free quotes from insurance carriers in your area so that you can find the most affordable insurance for you.

www.enetinsurance.com

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