Losing a job doesn’t mean you’ll just be losing a paycheck–it could mean losing valuable health insurance benefits as well. And for individuals and families alike, going without health insurance coverage is a very scary prospect, indeed. If you know you’re going to lose your job, or you’ve just recently been terminated or laid off, it’s important to explore all of your options right away so that your health insurance coverage can continue with little or no disruption. If the employer you were working for offers the option to carry on temporary coverage with COBRA insurance, it’s one you should seriously take into consideration. If you’re unfamiliar with COBRA insurance, here are 8 things you should know about it that will help you decide if it’s the right option for you.
Who Is Eligible for COBRA?
If you are fired or laid off by your employer, you are most likely to be eligible for COBRA insurance. There are exceptions to this, however. If you lose your job for a reason that could be classified as “gross misconduct,” you may not be given the option to continue with insurance under COBRA. Also, the size of the company you worked for will determine whether or not it’s an option for you.
Who Pays for COBRA?
While COBRA allows you to continue the same insurance coverage you had under your employer, your employer will no longer be responsible to pay for it. If you elect to continue your coverage with COBRA, you will be responsible to cover the premiums yourself.
Can an Entire Family Get Coverage Under COBRA?
Any family members that were covered on your insurance policy while you were employed will continue to be covered under COBRA if you decide to elect the coverage. As long as you are eligible, previously insured family members will be, too.
How Long Does Someone Have to Elect Coverage?
Once you’ve lost your job and are given the option to continue health care coverage with COBRA, you have sixty days to make a decision. If you decide not to elect coverage, you won’t be offered it again.
Is COBRA Coverage an Option for Small Business Employees?
One of the downsides to COBRA insurance is that it’s only offered to employees who were fired or laid off by companies with twenty or more employees. If you were employed by a small business with less than twenty employees, you would not be offered COBRA if you lost your job.
How Long Can Someone Be Covered Under COBRA?
COBRA coverage is typically offered only for a period of up to eighteen months. The duration of coverage under COBRA varies from situation to situation, and not all individuals or families will be eligible for a full eighteen months of coverage. Extensions beyond eighteen months can be requested, though–and in some cases, coverage can be stretched out to twenty-nine or thirty-six months.
Can COBRA Insurance Discontinue Unexpectedly?
Unfortunately, there are instances when COBRA insurance could discontinue early, and without much warning. If the business or company you were working for goes out of business, for example, your coverage would be discontinued. Also, failure to pay your premiums will result in early termination.
Is COBRA Expensive?
COBRA insurance is quite expensive–especially due to the fact that your previous employer is no longer responsible to pay for your premiums. Even if they never paid the whole cost, the portion that they did pay made insurance more affordable for you or your family. If you elect to receive COBRA coverage, you may be able to opt for a cheaper plan during your former employer’s open enrollment period, which takes place once each year. Switching to a plan that’s not as expensive when you have the chance will make the premiums a little bit easier to handle each month.
While COBRA insurance is only temporary and can be pricey, it’s an option you should think about if you’re faced with losing your health benefits. By taking the time to closely examine what COBRA insurance is, you’ll be able to determine whether or not it’s the best option for you or your family during a tough period of change and transition.
Guest post from Adrian Wade. Adrian writes for InsuranceCompanies.org.