Captain Contributor Explains COBRA Insurance
What is COBRA insurance? It’s one of those things that people usually hear about (but don’t really think about) until it’s time for them to use it.
Sometimes things happen that can cause you to lose healthcare coverage provided by an employer’s group health plan. Luckily, COBRA is an emergency option that keeps people from losing their health insurance until they can find other coverage.
COBRA Eligibility
To be eligible for COBRA, you and/or your dependents must have been covered by your employer’s group plan before a qualifying event. Qualifying events include:
- Job loss
- A reduction in hours
- Divorce or separation from a covered employee
- Death of the covered employee
- A covered employee qualifying for Medicare
You have at least 60 days to decide if you want to elect COBRA insurance. You can even decline coverage, then change your mind and elect it after all. Your coverage starts on the day you elect. But don’t feel like you have to choose COBRA - you can shop around for other insurance coverage, including exchanges setup by the Affordable Care Act.
Cost of COBRA Coverage
One reason you may choose not to elect COBRA is the cost. You usually pay the full premium amount, which means paying your part of the premium as well as any part that your employer had been paying. Plus, you could also be charged up to a 2% admin fee.
The good news is that you get to choose which insurance coverages you had that you want to keep, such as health, vision, or dental. However, you cannot sign up for a type of coverage that you did not have before. You can also choose who stays on the plan if you have covered dependents. These options can help reduce the cost of COBRA coverage.
COBRA Time Limits
It’s important to note that COBRA coverage does have a time limit. It generally lasts no longer than 18 months. In some cases, you can get an 18-month extension for a total of 36 months.
So don’t worry about your health insurance if something happens outside of your control that causes you to lose coverage. COBRA insurance acts as a safety net to make sure that you and your dependents can stay insured.