What happens when you leave an employer that has provided health insurance coverage for you and your family? Are you left without valuable health insurance coverage or does a federal law allow you to keep your employer’s health insurance plan for a limited time until you find another health insurance plan that takes care of most medical expenses?
The answer is the Consolidated Omnibus Budget Reconciliation Act (COBRA) gives you the opportunity to search for health insurance coverage after losing or leaving a job for a limited amount of time.
How Does COBRA Work?
Since 1986, COBRA has required private insurers for employer health insurance programs to maintain health insurance coverage for a limited amount of time after a federally approved qualifying event. A qualifying event includes losing a job for any reason besides termination for gross misconduct, as well as a temporary job loss caused by an economic or professionally-related reason.
You can receive health insurance benefits from COBRA for as long as 18 months in most instances, as long as you continue to pay the premiums required by your employer-sponsored plan. In some cases, employees qualify for health insurance that extends beyond 18 months if a second qualifying event happens in their lives. For example, you can become eligible for up to 36 months if you qualify for Medicare health insurance benefits before the end of 18 months after the first qualifying life event.
COBRA health insurance covers spouses, former spouses, and children that are dependent on you under a certain number of qualifying life events.
How Do I Enroll in COBRA Health Insurance Coverage?
According to federal law, your employer or the health insurance manager of your plan must inform you of COBRA eligibility. If you receive a notice of your eligibility for COBRA health insurance, you have at least 60 days to determine whether you want to enroll in a plan that provides you extended health insurance coverage. The key is to prove you qualify because of a live event such as divorce or the loss of a job.
You have 45 days after accepting a COBRA plan to pay your first premium.
What Are the Advantages of COBRA Health Insurance?
COBRA delivers several benefits for employees that lose their jobs or are dependents of a family member that no longer works for an employer that provided health insurance coverage. The primary benefit is receiving health insurance coverage during a transitional period between employment. For example, let’s assume you lose your job because your employer had to downsize the workforce. Enrolling in COBRA health insurance coverage allows you to maintain your healthcare coverage, without having to shop around for another policy. Bridging the health insurance gap after a qualifying event gives you peace of mind for up to 36 months.
COBRA allows policyholders to cover the healthcare needs of spouses, former spouses, and dependent children. You do not have to shop around for another policy that might charge higher monthly premiums for dependent coverage. If you take 60 days to enroll in a COBRA health insurance program, the coverage you receive is retroactive to the day when you experienced the qualifying life event.
You get to use the same claim filing method you used before the qualifying life event. This makes COBRA a convenient health insurance transitional policy because you do not have to become accustomed to a new and unfamiliar way to file a health insurance claim. COBRA can save you money on paying for medical care before reaching the monthly deductible. With the continuation of an employer-paid for health insurance plan, you should have access to a wider network of healthcare providers than if you purchased an individual health insurance policy.
What Are the Disadvantages of COBRA Health Insurance?
Although a COBRA health insurance plan can save you money on out-of-pocket medical care expenses, you can expect to pay a higher monthly premium for coverage. You must pay the premiums of your COBRA plan retroactively to the date of the event that made you eligible for transitional health insurance coverage. Your employer might change the terms of your health insurance plan, which means you have no control over what healthcare services you and your family receive under a COBRA plan.
Not every employer offers COBRA healthcare coverage. If you move out of state while covered by COBRA health insurance, you might lose your benefits.
The Bottom Line: Explore Cost-Effective Options From Insurance Broker Hub
COBRA offers professionals a healthcare safety net after experiencing a life-altering event. Maintaining health insurance coverage during a transitional period makes COBRA the ideal way to protect you and your family against the loss of health insurance.
You do have options. Whether you are eligible to enroll as a result of lost coverage, need to apply under the emergency Qualifying Life Event, need COBRA, or are seeking short-term health coverage, it pays to have someone in your corner who knows how to help.
Shopping for insurance used to be confusing and time-consuming. But with the help of our national network of licensed brokers, it doesn’t have to be. Insurance Broker Hub has helped over 10,000 consumers find the coverage they need at a price they can afford.
Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Ready to get started? Simply request a no obligation health insurance quote here.