COBRA Insurance

COBRA insurance is not a long-term plan, but it is a safe harbor of health care coverage for employees between jobs. COBRA supplies continued health care coverage that usually comes in connection to a job. With the economy conditions and many unemployed there are many people looking for work and turning to Cobra while between jobs. COBRA insurance covers much more than former employees, though. Other common users of COBRA insurance include recent retirees and people with disabilities.

COBRA insurance is based on a law that allows certain employees and their dependents to buy continued health insurance coverage through the employer's health plan when the employees stop working. In New York, COBRA applies to group health plans offered to most employees, except for Federal Government employees and certain other special types of employees. Cobra insurance is a specific form of coverage related to the wide realm of employer-provided health coverage. It is often based on a co-pay or employee contribution with employer matching fund basis.

Coverage under COBRA can be continued for up to 18 months, and up to 36 months when loss of coverage is due to divorce, disability, etc. When electing COBRA coverage, you must be sure to do so within 60 days of your qualifying event (such as loss of your job, divorce, etc.); after that time, the insurance company can decline your eligibility. Coverage under COBRA is retroactive (to the date of the qualifying event), and the first payment is due 45 days after you elect to participate in COBRA.

Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage.

Federal income taxes are not paid on these contributions or investment earnings until they are withdrawn. Federal law does not cover all people, only group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA.

Employers are required to notify you of this opportunity. Employers that self-administer their own group health plans (typically large firms) have 44 days to notify workers of their COBRA rights. Employers will allow such changes, or not, depending on the amount of administrative work associated with such decisions. The ability to change coverage will not allow an individual to start a medical flexible spending account or switch to coverage that provides only dental, vision, counseling or other referral services.

Employers and group health insurers must make such a period available to employees and their dependents when their family status changes or when their health insurance status changes. Employers often cover a substantial portion of health insurance premiums, so COBRA coverage can be expensive.

Employers pay for the subsidy out of their operating expenses, and then file for reimbursement from the government. Additionally, as insurance administration experts, we will monitor and keep you apprised of any changes to the COBRA law that you should be aware of, as well as modifications to IRS tax codes as they relate to employee benefits. Those individuals will have to pay retroactive premiums that cover that period when they make their first premium payment.

Although most part of the cobra insurance plan is from previous employer, but you may never have to foot the bills. Premiums depend on the amount of coverage, but are usually less than continuing your old policy under COBRA. Individuals can learn all the most accurate and up-to-date information and resources about COBRA insurance continuation of health coverage and medical insurance benefits. Depending on your age and health, you might be able to get a less-expensive individual private health insurance policy. Opting for less coverage can save some money as well, but many people still can't handle the cost, so they go without health insurance. Depending on where you live, the state offers a program for kids under age 18 who have no health insurance. Check with your local health department to see what is available.

COBRA Insurance Extension - The Essentials

Too often, laid off or terminated employees feel that they do not need to opt for COBRA benefits. For one thing, anyone who shows a lapse in health insurance coverage could have a difficult time being added to a new policy in the future. COBRA Qualifications

Simply put, COBRA allows separated employees to purchase supplemental insurance coverage that spans the gap between jobs. The provider of the plan is the individual's most recent employer. If you have been without a job for some time, the American Recovery and Reinvestment Act (ARRA) provides extended COBRA benefits to anyone who lost employment in the period between September 2008 and February 2009. If you are still without employment now, you could now be eligible to receive health insurance with your last employer's plan.

After you are no longer employed, you will have to foot the bill for health insurance premiums. The former employer is still the administrator of the plan, but they are not required to pay any part of the monthly premium. The federal government also offers subsidies, up to 65%, to anyone who is unable to afford the entire insurance premium.

Eligibility for COBRA insurance extension is determined by a number of factors including the size of the employer, the circumstances of separation, and many other rules and regulations. If the former employee does elect to continue health insurance coverage, there is a 45 day period in which the first premium must be paid.

There are also specific regulations from the health insurance provider as to how and when claims for extended coverage are filed. The insurance company may deny benefits. Because the health insurance provider often carries numerous plan stipulations, you may want to obtain assistance when dealing with the company.

There are many rules, regulations, and stipulations that apply to COBRA insurance extension benefits but there are also resources available to make the process easier. Look into the options today and don't be left without health insurance.

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