Cobra - Fall Back Health Insurance

Cobra - Fall Back Health Insurance

Cobra - Fall Back Health Insurance

There are many downsides to losing your job to say the least. One that may not immediately come to mind is the loss of your health insurance, but there is a form of fall back health insurance you can rely upon. 

COBRA may sound like an odd name for a health insurance subject, but it is the abbreviation of the legislation giving rise to insurance coverage for those who lose their job. The law in question is the Consolidated Omnibus Budget Reconciliation At of 1985. Now you see why COBRA is used! 

COBRA is designed to provide a critical bridge between the health insurance plans provided by employers. Put in simpler terms, it is a safety net for the person that loses their job and has medical needs. The importance of this bridge cannot be understated given the fact that many people have a spouse and children that need care. 

The program creates a bridge for health insurance by legally extending the plan of your former employer. If you resign or lose your job for any reason other than gross conduct, you can take advantage of COBRA. The law allows you to stay on the health plan of the former employer for up to 18 months. In many cases, your spouse and children can actually be covered for much longer. 

COBRA is not a free ride. You must pay the premiums to maintain the coverage. Although the coverage is from the health insurance plan of your former employer, the employer is no required to foot the bill. The law also applies only to businesses that have more than 20 employees.

So, who is able to take advantage of COBRA coverage? Obviously, you can. So can your spouse and your children. Interestingly, your spouse and children can take advantage of it even if you do not. 

The laws relating to COBRA can be fairly complex. There are exceptions to the federal law that can preclude you from health coverage. If you run into this situation, there may still be a solution. Many states also have laws on the book similar to COBRA and they are often more favorable to employees. If you can?t get coverage under the federal COBRA law, make sure to check with the Labor Board in your state to ascertain your rights under state law. 

At the end of the day, COBRA is a huge relief for people that lose their jobs for one reason or another. This is particularly true if you have a family that has medical needs.

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