What Is Cobra Insurance?

COBRA means Consolidated Omnibus Budget Reconciliation Act. This is health insurance that provides coverage to an individual after their job loss or any other significant event that results in a change in life condition that allows a person to change their existing health insurance policy. Some of the examples of qualifying events are the death of a spouse, adoption of a child, etc. Under this scheme, a person remains covered with their former employer’s health plan even if they are no longer employed. Qualified persons under this scheme need to pay their entire premium for covering up to 102% of their cost to plan. 

Who is covered under COBRA?

COBRA offers medical coverage for their employees who have lost their health insurance due to loss of their employment. Usually, COBRA allows them to stay covered under their employer's plan albeit at a higher cost. COBRA also provides healthcare coverage to spouses, and children depending upon that person. This policy only applies to the government or private-sector companies which have more than 20 employees. It does not be offered to those individuals who are already covered by the federal government, churches, or other such organizations.

By following the listed steps, an individual can check if they are eligible for the coverage offered by the COBRA health insurance or not:

To avail benefits of COBRA health insurance, an employee needs to be previously employed and be covered by an active health insurance plan. Additionally, they need to be fired, retired, laid off, or quit at any time of their employment. This insurance also covers family members, who are dependent on the employee for fulfilling their financial needs. The dependent could be the spouse who died or got divorced or legally separated from the employee. If an individual is still confused about the eligibility or how to avail the benefits of COBRA health insurance, they can contact the human resource team of employees.

Some of the events that may make an individual lose their health coverage and in turn get the license  to be covered by COBRA include:

• Termination of employment due to any reasons excluding misconduct with other staff of the organization
• Loss of active insurance due to the reduction in the number of hours of employment
• In case of loss of dependent child status under the health insurance coverage
• In case, the covered individual becomes eligible for the coverage of Medicare
• Legally separated or divorced from the covered employee

Benefits of COBRA Health Insurance Plans:

• COBRA policy is beneficial for an individual employee as it eliminates the requirement for them to find new insurance coverage at the spot. They just need to enroll for COBRA insurance and thus can stay on with the same insurance plan. If an employee is in between jobs, then, COBRA insurance gives them continuity and stability, especially if they have a lifelong medical issue and need an active health insurance plan. 
• Many employees want to cover their spouses and children with COBRA health insurance, they can do so by adding themselves and their loved ones to an employer-sponsored plan. This policy ensures to cover the terminated employees, their family members and also take care of their medical needs. It means spouses and children can keep visiting their doctor, avail themselves of the services without worrying about their insurance plans.
• COBRA Health Insurance Plan seems to be an ideal option for all the individuals who lost their job due to any reason. After all, it is giving them the opportunity to continue with their health policies and in turn, reduce mental pressure on them.
• While choosing COBRA healthcare policy, an individual can continue with the same active health plan without the need to change their plan due to a lost job.

How does the COBRA health care plan works?

If an individual is qualified for COBRA insurance then, their health plan administrator needs to notify them about applying for this insurance. Afterward, a person has 60 days to sign up for this health insurance. During these days, if the individual takes medical care and does not opt for this insurance, still they can claim it from their insurer. After that, a person gets 45 days after signing up to pay for the first premium. If an individual is disabled then, they may get an 11-month extension of COBRA after this period, the COBRA insurance policy will expire. After the time frame of 11 months, an individual needs to pay the high amount of 150% of the premium.

COBRA health policy is the best option to consider in case of losing your health policy sponsored by your employer. It provides an individual with the same coverage they had during their employment. It means an individual can continue with their health insurance plan even after losing their job.