COBRA Health Insurance Protects The Unemployed


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Here is a scenario faced by many people; you've just become unemployed. Suddenly, you have no salary, and no health insurance. Right now, one of the last things you want to do is send a check to your ex-employer! However, that is exactly what you'll need to do. In most cases, you are likely eligible to be covered by your employer's COBRA health insurance plan. By paying the premiums yourself, you will be eligible to remain covered, without any lapse in benefits, by your former employer's health insurance plan.

What Is COBRA Health Insurance?

Prior to 1986, loss of employment would also mean loss of you and your families health insurance coverage (if they were also covered by your employer). In 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed. COBRA health insurance provides you the right to extend your employer-provided health insurance coverage. You continue to receive the same benefits, but at your own expense.

COBRA health insurance requires your former employer to offer extended health insurance coverage to covered employees, and their covered dependents. However, there are certain qualifying conditions. These conditions include the death of the employee, termination (fired, or laid off through no fault of the employee), a reduction in work hours except if due to gross employee misconduct, a spouse's divorce or legal separation from the covered employee, a covered employee being eligible for Medicare, or a child that loses his dependent status under the plan. The COBRA health insurance program covers many contingencies.

Generally, COBRA health insurance provisions apply to private employers with at least 20 employees. Individual state and local governments may also make rules regarding eligibility for COBRA health insurance. Take note that the COBRA health insurance provisions don't apply to health insurance plans sponsored by the Federal government. Also, these provisions don't apply to certain church sponsored insurance plans, or certain church-related organizations.

Former employees who elect to receive the continuation offered by COBRA health insurance agree to take over payment of the plan's premiums. The former employer has the optional right to charge an administrative fee of up to 2%.

Should you lose eligibility for group coverage for yourself, or your dependents, there may be another option. Automatically enrolling in COBRA health insurance may not be your best bet. You may have the right to “special enroll" (without waiting for an open enrollment season) in other available group health coverage. Before deciding to enroll in COBRA health insurance, be sure to carefully weigh all your options.

If enrolling in COBRA health insurance is your only option, do it. Continue to protect yourself, and your family until you find a new employer, or new insurance. Contact your state's Department of Insurance to learn your full rights under COBRA health insurance.

Copyright ©2006 Carl DiNello

Carl DiNello is an Article Author whose articles are featured on websites covering the Internet's most popular topics.

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