What is a COBRA Health Plan?
COBRA is actually a federal law: Consolidated Omnibus Budget Reconciliation Act – which helps some former employees and their families extend their company’s health coverage after they leave a place of employment. Not all companies have to extend this coverage. For instance, a business has to have at least 20 employees, so an employee of a very small business may not be able to rely on a COBRA health insurance extension. On the other hand, employees with disabilities may be able to get extended coverage beyond what others could expect. Be sure to read your company human resources manual or discuss the plan with a benefits person before you make a decision about unemployment health insurance plans.
How Much Does COBRA Coverage Cost?
Well, this is one unpleasant surprise that many employees face after they terminate their job. In general, larger companies pay a large portion of the health plan and only require a small contribution from employees. In general, the ex-employee must pay the entire premium for a COBRA extension, and they may also pay a small administration fee. So an employee may have contributed $250 a month while their employeer contributed $750 for a family’s coverage under a group health plan. Under a COBRA extension, the employee could be responsible for the entire premium, plus a 2% administration fee every month. Many employees are shocked to see a $1020 insurance premium once they leave their job.
Is COBRA the Only Health Plan Option After Employment?
Of course, consumers are free to seek individual health insurance to cover their families while they seek other work or start their own business. If the family is in good health, they will probably be able to find cheaper coverage on the individual market because private health plans have the option of picking and choosing who they want to cover. On the other hand, if a family member has a pre-existing condition, is pregnant, or knows they need a medical service in the near future, and individual health insurance plan may not be a good option at all! You need compare plans and options in your state to decide on the best health plans for your family.
Be sure and obtain coverage before you cancel any policies you have now.
COBRA, health plans, individual health insurance, unemployment, health insurance
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