What is COBRA?

COBRA is an acronym that means Consolidated Omnibus Budget Reconciliation Act. It refers to a provision in the 1985 law that provides for the continuation of health coverage benefits after an individual has become unemployed.

When an individual is enrolled in an employer’s health insurance plan, the employer generally covers a portion of the monthly premium, which reduces the cost for which the employee is responsible. When a person loses access to his or her family health insurance through an employer, however, the entire cost of insurance will be his or her responsibility. This cost may be exponentially more than it was previously.

COBRA allows employees who worked at a company with at least 20 employees and who quit, retired, or resigned, or who were not fired for gross misconduct to retain their group insurance plan for as long as 18 months after the termination of their employment.

The individual’s dependents will also qualify for COBRA coverage if they were covered on the employee’s group plan. However, the employee will be able to elect to decline COBRA coverage for certain members of his or her family if desired, and it is not mandated that all previously covered members be similarly covered under COBRA. All benefits and plan limits will remain in effect, and subscribers will be entitled to use the same preferred health care providers and required to pay the same copayments. The entire cost of the premium is the responsibility of the covered individual.

Although COBRA insurance may be more expensive than the individual health insurance a person may have had through his or her employer, the coverage is provided at group rates, which are often lower than individual rates. Because coverage is continuous, COBRA may help reduce any difficulties that can be associated with qualifying for a new health insurance plan as well.

To learn more about COBRA coverage, contact one of our qualified insurance agents today.

 

Source: Health Care Los Angeles

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