When you lose your job you are faced with a number of financial and other issues including the loss of your medical health insurance. COBRA is a federal law that provides for continuation of health insurance coverage for up to 18 months after a job loss. However, there are a number of eligibility requirements that must be met to qualify for the continuation of health insurance coverage through COBRA and are discussed below. There are several other health insurance options available such as enrolling through a special enrollment in a spouse's group, government programs such as Medicaid, State Children's Health Insurance Program or Medicare. You can also purchase private health insurance. An evaluation of all the insurance options available is advisable during this period of time when handling your finances correctly and making smart money decisions is critical to you and your family.
Things You Will Need
Information from your former employer concerning prior health insurance coverage
Information on government programs
The first requirement is that you were enrolled in your company's health plan while employed and the company plan is continuing. Also, your former employer must have had at least 20 employees to be covered by the COBRA legislation. When your job ends, your health plan must notify you in writing about your rights under COBRA and you have 60 days from the date of the notice or the date the coverage ended to elect to the coverage.
You must pay the premium that you were paying plus the amount that your former employer was paying. There may also be up to a 2 percent administrative fee added. This may seem high but it is at group rates which are generally less expensive than rates charged to individuals. The American Recovery and Reinvestment Act of 2009 (ARRA), commonly referred to as the "stimulus bill", provides for premium reductions and additional election opportunities for health benefits under COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the insurance coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months for those eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 due to an involuntary termination of employment that occurred during that period.
You must make sure that payments are made in full and on time. Failure to do so will result in the termination of the health insurance coverage. Usually reinstatement is not allowed after insurance coverage has been terminated.
Losing a job can be a traumatic experience in itself. Not being able to continue health insurance coverage can add tremendously to the stress, especially if there are children to be covered. Knowing some of the options available for insurance coverage can help to alleviate some of the anxiety.