COBRA Health Insurance

COBRA Savings

The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides certain rights to citizens that lose their jobs along with their employer based health insurance coverage. This is an excellent option to continue coverage, especially when you are awaiting the completion of a probationary period at a new employer. However, the COBRA health insurance option does have some limitations.

COBRA permits employees to retain their employer based health insurance for a period of 18 months. Under certain qualifying events, COBRA coverage can be extended to a maximum of 36 months.

To be eligible for coverage, your employer must notify you within thirty days of termination of your rights to extend medical coverage with COBRA. At such time the individual has up to sixty days to decide whether or not they wish to continue health insurance coverage under COBRA.

When an employee elects to utilize their rights under COBRA, most find that they are billed 102% of their total health insurance premiums. The law allows employers to add the two percent for administrative fees.

Unfortunately, many individuals find that they are not able to extend medical coverage under COBRA when a job loss occurs. To be eligible for COBRA consideration, an employer must have employed twenty or more employees. Those businesses with fewer then twenty employees are not required by law to provide COBRA coverage.

Under The American Recovery and Reinvestment Act of 2009, employees that do qualify for COBRA coverage only have to pay 35% of the total health insurance premiums for nine months. This is especially helpful in an economic climate that has created six unemployed workers to one job opening.

To learn more about your rights under COBRA, please visit the US Department of Labor website.


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