UNDERSTANDING TYPES OF HEALTH COVERAGE

 

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  • COBRA

    The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federally protected law that was created to provide covered employees and their immediate families with temporary continued access to employer sponsored group health insurance benefits when such access will otherwise be terminated. For many, COBRA is a viable option when they are put in this situation.

    For others, the expense and impermanent nature of COBRA make for an un-wanted temporary solution, and they find that individual health policies or short term health insurance plans work best. In order to determine if COBRA is right for you, it is important to fully understand what COBRA offers. Once you have an understanding of how COBRA works, compare your other options to find what best suits your medical and financial needs.

    COBRA Eligibility

    COBRA was designed to provide temporary continuing coverage for employees, their spouses, ex-spouses, and dependant children. It does not apply to everyone though, as eligibility is reliant on limited conditions. You may be eligible for a COBRA plan if you are currently or were recently (within 60 days of leaving the workplace) employed by a company that had more than 20 employees and offered group health insurance at the time of the qualifying event. A qualifying event for a COBRA plan is one in which the life or employment situation of an individual changes in a way that causes an individual's coverage to be terminated. These events include:

    Termination of employment (death, retirement, dismissal, resignation)
    Reduction of working hours
    Divorce (spouse)
    Loss of dependent status (child)

    If you are un-certain about your eligibility for COBRA and want to make sure you and your family are covered, you should also explore individual health plan options.

    Coverage with COBRA

    The COBRA plan offers health coverage to a terminated employee for a maximum of 18 months, sometimes less depending on how you qualify for the plan, and the family of an employee for up to 36 months, offering the same benefits as the initial group health care policy. It is important to note that COBRA only covers medical insurance, and does not include life insurance or disability coverage. The following are some of the benefits offered by a COBRA health plan:

    Inpatient and outpatient hospital care
    Physician care
    Surgery
    Prescription drugs
    Other medical benefits, such as dental and vision care