What is COBRA insurance?
If you have lost your job based on health insurance, You have two options: Replace it with another plan (either on the market or through a new employer) or sign up for Cobra Health Insurance.
To your surprise, Cobra insurance has nothing to do with snakes. Cobra Health Insurance, from the Joint Almighty Budget Reconciliation Act, allows you to temporarily (usually up to 18 months) the employer-based health plan you had at your former job. Many employers with group health plans offer this option to employees. The basic idea behind Cobra is to help you and your family avoid a gap in health coverage. Trust us. You don’t want to have a gap in the cover!
Who qualifies for this?
Three factors determine who qualifies for Cobra insurance. If you meet the requirements, you can keep your insurance (assuming you want to stick to the same health plan and benefits from your old job)
1. You lost your job on the based group health plan.
If you decide to quit your job, reduce your working hours, or lose your health coverage after being laid off, you are eligible for COBRA continuous coverage. The only exception is if you are fired for a crime (and if health insurance is the least of your problems).
2. You covered under a group health plan.
If you, your spouse, and your children cover your workplace health plan, your entire family can benefit from the COBRA program. But if you are the only person covered, no one else in your family will qualify for Cobra. If your spouse or children covered under your old employment plan also qualify for Cobra.
Your spouse or children covered under your old job’s plan will also be eligible for COBRA if:
- You pass away or disappear.
You will disappear. Even if you no longer need health insurance, your family can still be under the cobra.
- You get divorced
If you and your spouse are separated and they are on your health plan, they can keep the same cover with Cobra. The same thing applies if you are on their health plan.
You go to Medicare. When you move to Medicare, your family can extend their coverage under Cobra.
- Your kid grows up.
By the time your child is 26, they are alone, at least in terms of health insurance! But while they hunt for their insurance plan, the coverage gap can be avoided.
3. Your group health plan qualifies under COBRA.
Whether you work for a large law firm in New York or at a small public school in Nebraska, many employers who provide health care benefits must provide cobra insurance after they leave. Although there are some exceptions. Cobra does not give to employers with less than 20 employees. If your employer leaves the business or everyone in the company terminates its health insurance, continuous coverage could not provide.
How much does it cost?
It’s easy to forget how much your job-based health insurance costs, especially since your employer helped you step out of the bill. It all changes when you leave, part-time, or get started.
Your monthly Cobra premium (or payment) equals the total cost of the premium under the health insurance which sponsored by your employer and is 2% of the administration fee. If you are insuring through your employer for a while, the cost of carrying that coverage yourself will fluctuate.
In 2017, the average annual premium cost for employer-sponsored health insurance was $ 6,690 for single coverage and $ 18,764 for family coverage. But employers usually cover 82% of the costs for individuals and 69% for families on average with Cobra insurance. You can pay an average monthly premium of $ 569 or $ 1,595 for family coverage to continue your coverage.
How long does COBRA continuation coverage last?
If you like your job that based health plan, you can keep it for at least a while. Again, continuous coverage under Cobra has designed as a temporary extension of the health insurance you had at your old job. The keyword here is temporary. In most cases, Cobra coverage lasts 18 months from the date you choose to register. Under special circumstances, you and your dependents will be able to extend cobra coverage for up to 29 or 36 months. But beware, if you delay that first payment, you will lose the right to Cobra coverage and you will not be able to get it back. If you delay a monthly payment thereafter, your coverage will cancel on that day. However, if you make your payment within the 30-day grace period, you can reinstall your Cobra cover.
How do I decide between COBRA and other health insurance options?
Whether you are choosing a health insurance plan or what to choose for dinner tonight, there are always plenty of options to choose from. As I said before, you have options other than Cobra.
If you are still looking for a new job, decide to start a business for yourself, or need insurance to cover the gap until you get your health care benefits at the start of your new job, you will most likely find out by purchasing health insurance. The market is less expensive than Cobra. How do you decide which health plan is best for you?
Here are some things to consider:
1. Know your medical needs.
The medical needs of you and your family will often not be the same as those of an adjoining home Jones, so it is important to know what you need and find a health insurance plan that makes sense to you.
For example, if you have prescriptions, you should check whether they have covered under COBRA or a market insurance plan. Take a look at the overall coverage and supply chain.
2. Understand the differences between plans.
Things can quickly get confusing while you try to find all the health insurance plans out there. You need to understand what you are getting and the differences as you look at each option.
This means that if you go with HMO it will cost more to see your doctor. In such a case, you should do some soul searching and ask yourself how much you like your doctor.
Here are the details you should consider when deciding whether or not to choose Cobra. Different designs have different coverage options, so be sure to find out what you are registering for!
03. Weigh the costs.
Cobra insurance is often more expensive than market insurance because there is no financial support from the government to help you pay those Cobra premiums. If you choose a plan from the market, you can check with an independent agent who can help you shop for different health plans to see if you qualify for a premium tax credit.
If you qualify for a tax credit, it will help you reduce your monthly payments and do not need a down payment. Americans are increasingly turning to health savings accounts (HSAs) and deductible health plans (HDHPs), which have a lower average premium than other health plans. Using HSA can be a good way to save money on health. Insurance costs, if you have it.