Cobra Your Health Insurance Plan After Your Employment Ends
Date Added: July 10, 2008 12:57:07 AM
Introduction:
In the event that you or any member of your family is ever sick or injured, having adequate health insurance will help cushion you from financial hardships.
Don’t wait until you are involved in an accident, suffer a serious illness, or discover you're pregnant to get health insurance. Always be prepared as this will serve you a lot of grief and financial heartache.
Unfortunately, health insurance is not within the reach of everyone. And in a country as developed as America, it’s a shame that there are no state or federal laws requiring private firms to offer health benefits to their employees, which means that you may have to go it alone.
It’s not all gloomy and doomy as there are some progressive employers that do offer health insurance as a way to attract and keep workers. Group health plans are usually offered in such cases, whereby the employer contributes a large part of the premium.
The health plans are usually subject to a variety of state mandates - such as what benefits must be included, etc - except in cases where the employer is self-insured.
Of particular importance is COBRA, considering the financial impact of suddenly finding yourself unemployed can have on you and your family. Though not foolproof, it can be a great help when needed.
A Brief Look At COBRA:
Should you voluntarily resign from your job, have your employment terminated for any reason other than "gross misconduct” or have your working hours reduced, there is a federal plan called The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), which guarantees that you can continue your former employers group plan for individual or family health insurance for up to 18 months at your own expense.
In the event of divorce or legal separation and death of employee, your spouse and dependent children may continue to benefit for as long as three years. The same applies in cases where the employee is entitled to Medicare.
However, if you choose to continue your health insurance under COBRA, you will end up paying more than you were as an active employee as your previous employer is no longer obliged to pay their part of the premium and the whole amount has to come from you.
While you’re not allowed to choose a less expensive plan when continuing under COBRA, your previous employer can - at their discretion - give you the option of dropping such "noncore" benefits as dental and vision care, which will reduce the premiums you have to pay.
COBRA continuation rules are not meant just for workers from private firms but also extend to workers in state and local government, and independent contractors. However, exemption is granted to the District of Columbia, federal employees, certain church-related organizations, and firms employing less than 20 people.
While continuation under COBRA is generally a good idea, if your previous employer switches plans for its current employees to an inferior health insurance plan, you won't be allowed to keep benefits from the old plan. However, where the employer decides to switch to a better health insurance plan, you are entitled to receive benefits under the new plan.
In order to be eligible for COBRA benefits, your employer must notify the health plan administrator within 30 days following death, job termination, reduced hours of employment or eligibility for Medicare.
However, where COBRA benefits are sought following divorce, legal marital separation or a child's loss of dependent status, yourself or your family (rather than the employer) have the responsibilty to notify the health plan administrator within 60 days of the event.
Find out more about health insurance in Resolving Health Insurance Disputes.
