COBRA (Consolidated Omnibus Budget Reconciliation Act) insurance was created in 1985 as a way of giving people who’ve lost their job the option to continue with their current health insurance for a limited time. Any employer (besides the federal government) who has at least 20 employees is required to offer this coverage. So, what is COBRA health insurance?
Qualifying for COBRA Insurance
There are only certain situations in which you can use COBRA. These are what’s known as “qualifying events.” As an employee, these include being covered by your employer’s health plan while you were employed by them and they’re no longer required to provide you with insurance.
Dependents of those who qualify for COBRA insurance may also be eligible in certain situations. These situations include being a dependent on someone who qualifies even if they’re your spouse and you’re getting a divorce or they’ve died.
Determining your eligibility is as simple as contacting the employer’s human resources department.
How COBRA Insurance Works
What is COBRA health insurance, your health plan coverage will be extended beyond the point of when the employer’s plan would otherwise end. You’ll be made aware of your eligibility for this insurance by your employer, your insurance carrier, or both. However, when you first enroll in your health insurance plan is when you’ll initially learn of your rights to this coverage. Once you find yourself in need of using it you’ll have 60 days in which to enroll. Otherwise, your insurance coverage will end on the date your employer’s plan coverage is stated to end.
When you elect to continue with COBRA overage it’ll start the day after the employer’s insurance policy ends. With it you’ll have exactly the same benefits you had while on your employer’s insurance plan. This is good news because it means you’ll be able to see the same doctors and providers you’re already seeing for the next 18 – 36 months depending on what qualifying event made you eligible for COBRA in the first place.
The only time when COBRA can be terminated early is if you don’t pay your premiums or other coverage fees or you get a job that offers you health insurance. Up until this point, you’ll essentially still remain on your employer’s health plan. You should know that COBRA won’t cover supplemental coverage (e.g. disability, life insurance, hospital care insurance) or any type of voluntary coverage.
Conclusion
COBRA is essentially the continuation of your employer’s health insurance plan. It’s good to have this in place because you never know what the future may hold.