How To Keep Your Health Insurance After You Lose Your Job
Have you ever heard of Consolidated Omnibus Budget Reconciliation Act or COBRA as it is more popularly known? This law does not only have a cool name but is very important for workers across the States as it can help them bridge difficult situations.
This law lets employees apply for health benefits or health insurance even if they do not qualify for some reason. Even though you still have to pay the full premium amount, if you go through an employer you can receive health benefits for significantly less. In this article, we will explain what COBRA entails.
Who is eligible?
Every employer who has more than 20 employees has to comply with COBRA. This is a federal law, meaning it is valid in all states though the specifics vary. For example, in some states, the minimal number of workers is lower than 20. In the case of an unforeseen event like termination or reduction of hours that limit the health insurance, all the employees previously covered by the employer’s health insurance stay covered according to this act.
How to qualify for this act?
There are several ways an employee might lose their health benefits. This is when COBRA comes into play. Getting fired is certainly the most terrifying and most common prospect that leads to seeking COBRA coverage. If you were terminated for any reason save for gross negligence, you will be covered by this act.
Another common event involves losing the required amount of work hours necessary for health coverage. Sometimes, you might even be eligible for COBRA after you quit your job. If your dependents rely on your health insurance, they could remain covered if you and your spouse get a divorce or get legally separated.
How long am I covered for?
COBRA is not meant as a permanent solution, but rather a temporary patch. It is supposed to help workers until they manage to find a new job or stand back on their feet. Therefore, an employee is covered for a year and a half. Their dependents, however, stay covered for longer, up to 36 months if the person they are covered through is not fired.
How much do I have to pay?
As we previously mentioned, the employee has to play a full premium for the employer’s health insurance. However, during the period of the latest financial crisis between 2008 and 2010, the payments were subsidized to 65% of the full premium.
The reason why this plan is considered very helpful is that you can pay for your insurance in a group. Group policies are much more affordable than single ones, saving you a lot of money if you are associated with a company.
How can I apply?
You should receive a notice by the health care plan administrator or your employer, stating whether you qualify or not. If you are eligible for COBRA after any of the mentioned events you or your employer have to notify the health plan administrator that you want COBRA coverage. There’s a deadline of two months to notify the administrator whether you accept the terms or not.
COBRA can help you bridge a gap between two jobs and get you out of a difficult spot. If you still don’t understand the process or need help applying, look for a reputable workers compensation attorney.