What is cobra insurance and how does it work?

cobra insurance

The Fear of losing your job is often compounded by a fear of losing your health insurance, but now through a federal law known as Cobra, you may be eligible for the continuation of your health insurance. Below, we will explore the basic details of Cobra.

What is cobra insurance?

COBRA (the consolidated omnibus budget reconciliation act) is a federal law that allows employees to benefit from health insurance coverage under certain circumstances, for Instance; you lose or quit your job, divorce, death or no longer covered as dependent because of your age.

How long does Cobra last?

Cobra coverage starts the same day your employee’s health insurance starts. The length of the period of cobra coverage will depend on the type of qualifying event. It may last for 18 months, 29 months, or 36 months.

What qualifies you for Cobra?

The employee qualifies for COBRA coverage in the event of the following:

  • Eligibility by the covered employee for Medicare.
  • the loss of employer insurance coverage.
  • Voluntary or involuntary job loss.
  • Death of a covered employee.
  • Divorce or legal separation.
  • Getting fired.

How does cobra insurance work?

Firstly, Cobra Insurance provides your employer’s health plan. Moreover, you benefit from the same coverage, though your former employer stops contributing money to pay for coverage.

The employer must notify the health insurance company within 30 days if he loses or quit his job, or become eligible for Medicare.

Moreover, if you have a family plan, not all family members have to enroll in Cobra. For Instance, you can waive the option, but your spouse and kids could still keep COBRA or vice versa.

Finally, you can also cancel Cobra insurance any time; you are not locked into an 18 Month commitment when you sign up.

How much is cobra insurance?

Cobra requires you to pay 100% of the health insurance costs plus a 2% administrative fee. Employees usually pay less than half while the employer pays the rest.

COBRA is pricey, but there are some possible avenues to help. One possibility is to use a Health Saving Account (HSA) to help pay for Cobra.

Moreover, these savings accounts let people save tax-free money for health care costs, and those costs include COBRA.

Finally, COBRA is expensive, but it also provides you peace of mind if you ever lose your job. Cobra is the right choice for you, depending on what you want from your health plan and how much you are willing to spend.

How long does COBRA take to kick in?

COBRA coverage begins on the first day of your qualifying event. The first day you are no longer employed would be a good example.

In most cases, Cobra can last 18 months from the date of the qualifying event starts, and this will be the case if you leave, lose your job, or see a reduction in your hours that results in a loss of your benefits, which can last for up 36 months in some cases like death or divorce.

Can I get Cobra for 36 months?

COBRA coverage for the employee’s spouse and dependents can last until 36 months after the employee becomes entitled to Medicare. Moreover, COBRA coverage for his/her spouse and children would last 28 months, and For other qualifying events, they will provide 36 months of continuation coverage.

Is Cobra cheaper than private health insurance?

Many employers in the US must provide health insurance to their qualifying employees by paying a part of their medical costs. Besides, an employee becomes ineligible to receive an employer’s health insurance benefits, which can happen for many reasons.

Suppose the employer stops paying his share of the employee’s health insurance. In that case, COBRA allows the employee and their dependents to retain the same health insurance coverage and benefits for a limited period.

COBRA is expensive, but there are some possible avenues to help. One possibility is to use the Health Savings Account (HSA) to help pay for COBRA.

HSAs are found in high-deductible health plans, and these savings accounts help people save taxes and free money for health care costs.

Can you get Cobra if you quit?

By applying for COBRA, You can temporarily extend your employer-sponsored health insurance coverage after quitting or losing your job.

Moreover, COBRA allows you to do that for up to 18 months. in some cases, your spouse and dependents can stay covered for up to three years

How to apply for Cobra?

You can apply for cobra insurance by calling 1-800-318-2596 or 1-855-889-4325. Also, for more information, you can visit the following website:
https://www.healthcare.gov/unemployed/cobra-coverage/

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