Today’s topic? The Consolidated Omnibus Budget Reconciliation Act, aka COBRA. Many people cringe at the sight of these 5 letters. It probably doesn’t help when they’re synonymous with a deadly snake that can kill an elephant in a single bite. But COBRA insurance does provide protection for a lot of people.
COBRA allows you to keep the health insurance benefits you had during active employment if you quit, get laid off, are put on temporary leave or are involuntarily terminated.
Why so pricey? Your COBRA premium costs the same as your previous health coverage, except this time you have to flip the bill for the 50%+ portion of the tab that your employer subsidized as part of your benefits package, plus an additional 2ish% percent for administrative costs.
Here’s how it unfolds: Your employer gets 30 days to notify COBRA that you’re eligible, and COBRA then has 14 days to inform you of your status. You have up to 60 days after a qualifying life event to enroll, and 45 days after that to make your first payment. Coverage with COBRA is retroactive. And that’s that.
If your spouse has access to health coverage through their employer, you’ll most likely qualify as a “change of life” status for special enrollment. Or consider individual health insurance—you might even be protected via HIPAA for pre-existing conditions during the switch. In addition, visit www.healthcare.gov to learn about other plans you might be eligible for.
Just remember, you do have some options when it comes to your health insurance. Or any insurance for that matter. Consult with a trusted, licensed insurance broker for the option that’s best for you.