Health Insurance

What Is Cobra Health Insurance

COBRA health insurance is a type of continuation health insurance that is available for certain people and under certain circumstances when employer-sponsored health insurance terminates.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows for those who received group health insurance coverage through qualified employment to continue to receive health insurance at reduced group rates. However, the employer must have provided group health insurance coverage for 20 or more qualifying employees on at least half of the days of the previous year. Some employers are required to temporarily extend group health insurance coverage to qualified individuals and their families in specified instances where the health insurance coverage would normally have been stopped.

There are certain restrictions to those who are eligible to purchase group discount rated COBRA insurance. There are certain specifications to who qualifies to receive COBRA insurance that involve certain health plans, qualified beneficiaries, and specific events that qualify a person or persons to continue to receive health insurance coverage at reduced rates.

The people who typically qualify for COBRA continuation coverage are the employee, employee’s spouse, and any dependents of the employee. Typically, any person who was formerly covered under the employee’s group health insurance policy before it was terminated is eligible to continue with COBRA benefits.

If the person will go for the medical insurance, then they can avoid the extra expenses that they have to bear in the situation if the medical emergency arises. If the person will have insurance then the government will pay the sum of money.

Someone becomes qualified to receive COBRA due to a qualifying event in which their employer sponsored group health insurance coverage terminates. These qualifying events may be due to reduced hours and job termination under certain instances other than gross misconduct. Voluntary termination, medical leave, and other circumstances are considered qualifying events.

The employee’s spouse and dependents may continue to qualify for COBRA if the employee loses employer sponsored group health insurance coverage due to additional reasons that include divorce or separation, the employee qualifying for Medicare, and death of the employee.

The former employer is required to send the necessary information to the former employee and other qualified beneficiaries to notify them of their options when it comes to obtaining COBRA health insurance coverage.

For those who were enrolled in an employer sponsored group health plan, once they are no longer eligible to receive this coverage, they have 60 days to decide to pay for COBRA health insurance coverage. COBRA coverage typically costs more in the way of premiums than employer sponsored group health insurance coverage simply because the employer is no longer paying a part of the cost of the premium. This continuation of health insurance coverage offered by COBRA lasts up to 18 months, but under certain circumstances may last up to 36 months.

COBRA is not a specific health insurance plan, but a legal right to continuation of coverage through the health insurance and coverage you had through your former employer, but at reduced group rates. Though you may be paying more for the same coverage, you will still be paying less than if you were purchasing your own health insurance policy through some other insurance service provider.