The Consolidated Omnibus Budget Reconciliation Act
(COBRA), a law created in 1986, gives workers (and
members of their family) who lose their health
insurance benefits the right continue their group
health insurance for a limited period of time under
circumstances such as voluntary or involuntary job
loss, reduction in hours, transition between jobs,
divorce, adoption and death.
Generally, the employee pays up to 102% of the premium
cost for the same policy; this is still usually less
expensive than buying an individual insurance policy.
There are three basic aspects for qualifying for
COBRA: the qualifying event, the insurance plan
coverage and the qualified person.
Each aspect is taken into consideration when applying
for COBRA and you must elect to either apply for COBRA
or waive your rights to COBRA within 14 days after a
qualifying event.
You must also have been in the group insurance plan
during your employment to be eligible. Although there
are exceptions, generally you may continue to pay your
own premiums to keep COBRA coverage intact for up to
18 months.
Companies who have fewer than 20 employees, State or
Federal employers or employee organizations may not
offer COBRA coverage.
Check with your health insurance administrator to see
if you may qualify. You may also have this information
readily available in your group health insurance
policy or in your company handbook.
Although it may be expensive, the cost of being able
to keep your group insurance coverage rate may be well
worth it.