How Does COBRA Insurance Work
Health insurance comes in many different ways, and people have plenty of options to have their health insurance costs covered. A lot of companies provide solutions for their employee’s health insurance needs. Some insurance policies are designed to provide coverage for individuals in the event they lose their job, while other insurance policies provide coverage during prolonged periods of time with unemployment. Regardless of what the situation may be, customers have plenty of options to choose from to have their health insurance needs met, as well as their family’s health insurance needs. COBRA is one type of health insurance coverage that was developed in 1986.
Congress passed a new law in 1986 regarding health insurance for those who recently lost their job. IN fact, those who lost their job faced the problem of not having health insurance. COBRA was designed to provide solutions for these specific situations. The problems that the unemployed will face are already enough for the unemployed to handle. Not having health insurance only brings more stress on the unemployed. COBRA fixes this problem by giving those who recently lost their job the opportunity to continue their health insurance plan that they were receiving from their employer.
COBRA insurance works by the law that stipulates the employer must continue their past employee’s health insurance coverage for a certain period of time. The temporary coverage provided by COBRA allows the individual to have enough time to find another source of insurance coverage. This is a huge benefit for those who recently lost their employment. However, individuals are required to pay the full amount of insurance under the COBRA coverage plan. The cost of health insurance might actually go up because the individual is required to pay the premiums in which the employer was paying as well.
Those who recently lost their employment are not the only ones that are qualified to be covered under the COBRA plan. If the employee had an insurance plan that covers their family, they have the option to continue the family coverage under the COBRA plan. There are a number of events that qualify an individual and their family to be covered under the CORBA. If the employee loses their employment because of voluntary termination, layoffs, involuntary termination, and basic job loss situations, the employee will qualify for the COBRA health insurance coverage plan. However, COBRA is temporary and should be only used to fill the gap when finding another health insurance provider.
In most cases, COBRA health insurance coverage will only last the employee up to 18 months. Only those who have a disability can be covered longer than 18 months with COBRA. Up to 29 months for those who have a disability can use COBRA. The COBRA health insurance coverage can be canceled when the individual stops paying their premium or obtains new health insurance coverage. COBRA will begin coverage once the employee’s current health insurance plan expires. Signing up for COBRA coverage is extremely easy to do.
The employer will alert the insurance agency of an employee losing their employment for whatever reason. From there, the insurance agency will send out the required documentation to the employee. The documents will contain information about the COBRA coverage, and the applications needed to start the COBRA health insurance plan. These documents are sent out within 14 days, and the employee has up to 60 days to decide if they want the coverage or not. If the employee decides to start the coverage, they will be covered under the COBRA plan in 45 days. Those who have family members should speak with their family members to decide if COBRA will be the right coverage for a short period of time.