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COBRA Insurance Rules
COBRA insurance can be very confusing at the beginning and it can feel like there are hundreds of COBRA insurance rules that are hard to understand. Luckily these rules don't have to be as complicated as they seem and you can easily understand whether or not you qualify for COBRA once you get the key COBRA insurance rules.
Read through each rule carefully, making note of whether or not you will qualify for COBRA. If you find you don't qualify for federal COBRA, make sure to check out your state program. Additionally if you don't want to determine you COBRA eligibility yourself you can always contact your plan administrator and ask. They will be able to tell you if you qualify and the cost of COBRA for each family member.
COBRA Rule #1: Qualifying Plan
The first main rule for COBRA insurance that determines whether or not you qualify is the type of health insurance plan your employer had. The health insurance plan must have covered at least 20 employees (or their part time equivalents) and still be active. For folks who worked for the federal government, their health insurance plans do not qualify for COBRA. However, there is a separate program for federal employees.
COBRA Rule #2: Qualifying Beneficiaries
The second COBRA insurance applies to qualifying beneficiaries, or who else is eligible to continue their health insurance with COBRA. Under the current law people are eligible for COBRA if they are the employee, employee's spouse, or a dependent of the employee. In addition, retirees, their spouses, and their dependent children can also qualify. Finally, spouses can qualify for COBRA when there is a divorce, legal separation, or when the employee becomes eligible for Medicare. A final provision extends to children when they lose their dependent status. They are able to use COBRA insurance.
COBRA Rule #3: Qualifying Event
The qualifying event refers to the reason the employee, or employee's family members are losing their health insurance coverage. In the most common situations, the employee and their family members are eligible for COBRA insurance if the employee lost, quit, or retired from their job without gross misconduct. Additionally, a qualifying event for COBRA can be divorce, legal separation, outgrowing your dependent status, Medicare eligibility, or death.
COBRA Rule #4: COBRA Insurance Cost
One rule of COBRA insurance that many people are interested in is the cost of COBRA insurance. For federal COBRA insurance, the normal cost is your entire premium plus a 2% administration fee. Your employer will no longer contribute at all to your health insurance premium. For folks who extend COBRA due to disability, the rate can go up to 150% after the first 18 months. Learn more about the cost of COBRA.
COBRA Rule #5: Always Look at Alternatives
Looking at alternatives to COBRA should be a rule that all people considering COBRA follow. For people who are generally healthy, there are much less expensive options out there that can provide similar coverage. In fact, a family of four saves over 65% on average by choosing an alternative plan. To look at COBRA alternatives, get a free quote and explore your options.