For people who lost their job or were laid off, COBRA insurance is usually an option to continue health care for the employee and their family.
In most cases if your former health insurance plan covered 20 employees or more and the company is still in business, you can qualify for COBRA insurance under the 1986 federal law. This coverage lasts for 18 months in most cases and came about to protect people in your situation from suddenly going without health insurance coverage.
According to the federal COBRA law, when you are laid off your employer has 14 days to notify you in writing about your rights under COBRA. From there, you have 60 days to decide if you want to enroll in the coverage. If you do not sign up within that 60 day period or pay the premium, you will lose the right to coverage.
COBRA Insurance and Health Reform
In March of 2012, the Patient Protection and Affordable Care Act was passed by Congress to help ensure that more Americans have access to affordable health insurance and ensure people can actually get coverage. Under this law in 2014 there will be state run health insurance exchanges that people can use to purchase affordable health care. This law will not change COBRA insurance coverage in anyway, but it will likely decrease the amount of people who choose to use COBRA insurance.
The Cost of COBRA Insurance
With COBRA you get the exact same coverage that you had with your employer but the main difference is that you are responsible for paying the entire premium plus a 2% administration fee. This cost for most people is very expensive and normally runs over $1000/month for families. This is because most employers pay for up to 90% of the health insurance costs of their employees.
What Can I Do if COBRA Insurance is Too Expensive?
Most people can’t afford COBRA insurance. It is very expensive and most people who need it just got laid off so that kind of expense is unimaginable. According to some statistics COBRA insurance can eat up 60-70% of someone’s unemployment check leaving almost no room for other expenses. However luckily there are other options to explore if you can’t afford COBRA insurance. If you can’t afford COBRA insurance you should explore state and federal insurance programs like Medicaid and CHIP, private insurance which is normally much less expensive (you can get a quote below), and community health programs that provide free and reduced cost care.
Many people have lots of questions about COBRA insurance, specifically for their spouses and dependents, if they find themselves eligible for Medicare due to disability or other causes. It is important to know what COBRA health insurance coverage your family will be able to maintain if you begin to qualify under Medicare and honestly it depends on your situation.
RSS Feed