COBRA

What is COBRA?

COBRA is an abbreviation for Consolidated Omnibus Budget Reconciliation Act. COBRA was passed by the United States Federal Government in 1986.

COBRA is insurance that is offered to an individual who may have lost or been laid off his job. COBRA is also available to individuals who voluntarily resigns from his. Your health insurance provider is required by law to notify you of your rights to continue your health benefits under COBRA. COBRA guarantees that you can still receive health insurance under your former employers group plan for up to eighteen months. However, the coverage is at your expense.

COBRA is also available to full time employees who may have had their work hours reduced and who are now classified as part-time employees.

You don't have to accept COBRA right away. You have 60 days to accept COBRA coverage. If you do not accept COBRA within 60 days, you lose all rights to benefits

There are generally three groups of people who can qualify for COBRA coverage. These include former employees and/or retirees, the spouses of former employees and/or retirees, and the children of the aforementioned. A qualifying family member may choose to enroll in COBRA, even if the previously employed person does not.

COBRA does not cover any individual health plans that you have purchased on your own.

What Will a COBRA Health Plan Cover?

A COBRA health plan will cover all of the health benefits that you would have normally received through your former employer’s major group plan. These benefits can include outpatient care, inpatient care, doctor care, medication, as well as any surgical procedures that you may need. Depending upon your original policy, you may also receive vision and dental care, and prescription coverage in your plan.

If you are covered under COBRA and your former employer’s group plan changes, your plan will change, as well.

When Will My COBRA Coverage End?

• When your policy expires.
• When you fail to pay your premiums.
• When your former employer goes out of business or ceases to have group health insurance.
• When you obtain health insurance through another employer’s group plan. However, this plan must not contain any exclusions to because you have a pre-existing health condition.
• You qualify to receive Medicare benefits.

How COBRA Can Help with Pre-existing Conditions

If you change jobs and already have an illness or disease, such as cancer or arthritis, your new company's health plan may have a 'pre-existing condition" clause. The pre-existing condition clause will prevent you from receiving treatment of the medical conditions you had prior to getting new insurance. Use your COBRA benefits from your previous employer to treat your pre-existing condition. The pre-existing clause in your new employer's health insurance plan will probably expire after 1 year, then you can use your new health insurance to receive treatment for pre-existing conditions.

How much does COBRA Cost?

If can be quite expensive. The better your insurance and the larger your company, the more COBRA will cost. However, it might be better to accept COBRA coverage than not to have coverage at all.

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