What is COBRA health insurance?

First, what does it stand for? COBRA stands for Consolidated Omnibus Budget Reconciliation Act, now that’s out of the way, So

What does COBRA do?

COBRA is the federal legislation which ensures that employers who offer group health insurance to their employees must offer similar coverage to their employees on termination.


What is COBRA eligibility?

If you have, or had, job-based health insurance through your employer and your employment is/was terminated, whether it was voluntary or involuntary (but excluding dismissal for ‘gross misconduct’), you are entitled to the offer of COBRA continuation. You must formalize your intentions with your insurers within 60 days of the ‘event’.

How does COBRA work?

COBRA allows you to work directly with the employer’s health insurers to secure the same benefits that you would have had if your employment had not been terminated. 

While you will have the security of knowing that you have continuous coverage, you will, unfortunately, be responsible for the Cobra health insurance cost (+ a small Cobra continuation charge).

You may benefit from higher premium tax relief and the cost-saving benefits of group coverage.

How long must I keep the COBRA plan in force?

COBRA plans are meant to make transitioning from one employer group health insurance plan to another as stress-free as possible.  If there is a gap between one employment and the next you have several options.

  1. Job termination, as above, is ‘a qualifying event’ so you will have the opportunity to
    1. opt for COBRA
    1. join your spouse’s plan if this is an option
    1. find a marketplace plan that takes your current status into account
    1. change any of the above decisions on taking up your next employment or when you have a SEP or at the next open enrollment
  2. If you anticipate a lengthy period between employments you may qualify for Medicaid.
  3. If you are terminating on turning 65 you will be automatically enrolled on Medicare.

Special Enrollment Periods (SEPs)

Circumstances and expectations change constantly and we should constantly keep our health insurance needs under review. SEPs provide us with the opportunity to put plans into action. Check out our article on How do I qualify for Special Enrollment Period 2020?

How to apply for COBRA health plan?

Your Company plan coordinator or HR department should liaise with your health insurer. But to consider all your options talk to a Health Insurance Exchange for comprehensive and competitive advice on how to take advantage of your Special Enrollment opportunity.

START NOW! Make the most of your 60 day window!

Read more on COBRA health insurance on 7 Facts about COBRA health insurance

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