COBRA or COBRA Alternative? Q & A
What is COBRA?
COBRA is a 1985 law that allows you to continue your employer provided health plan if you are terminated or laid off or if you are separated from a spouse who is a covered employee. Children of covered employees are also eligible under certain circumstances.
Can all employer plans be converted to COBRA plans?
No. The following plans are not covered:
1) Small employer plans: companies with fewer than 20 employees.
2) The Federal Government's Group Health Plan: there is another, separate plan for Federal workers.
3) Church plans: certain church plans are not covered under COBRA
Who should take COBRA?
You should absolutely take COBRA if you or a covered member of your family has a preexisting condition. The greatest benefit to continuing coverage through COBRA is the benefits are guaranteed. As long as you are eligible, you cannot be turned down.
Is there any reason NOT to take COBRA?
1) COBRA plan premiums are usually very high. Remember, while you were working your employer was probably paying at least part or maybe even all of your insurance premium. Under COBRA, you pay the entire amount, your part and the part your employer was paying. On top of that, there could be an additional 2% administrative fee.
2) COBRA is only temporary. It's designed to last only eighteen months or thirty-six months with an extension.
Doesn't the government supplement part of the cost of COBRA?
Yes, there is a provision of the stimulus package that provides a 65% subsidy for COBRA premiums that is available to individuals who have lost coverage as a result of an involuntary termination of employment between September 1, 2008, and December 31, 2009.
Keep in mind,this subsidy is good only for nine months, after that you are responsible for the entire amount.
Couldn't I just enroll in my spouse's plan?
Yes, and this might be a good idea. A special law called HIPAA guaranatees that you and your children can enroll under your spouse's plan without regard to pre-existing conditions.
Beware. There are limitations. You and dependent children are eligible for special enrollment only if you each had health insurance when you previously declined your spouse's coverage. In addition, you must request special enrollment within thirty days of time you lost your own employer-sponsored health plan.
When should I consider an individual health plan?
Individual health plans are the best way to get the best health coverage value for your dollars by providing both cost savings and tailored coverage. It's important to remember that an individual plan might not work for those with pre-existing health conditions.
What's good about having individual health insurance?
1) Will usually offer more affordable monthly premiums
2) It will provide the best value for a health insurance dollar
3) Coverage can be customized, you might not need to be paying for the vision or dental plan offered by your old employer plan
4) The plan is mobile, it goes where you go and you aren't dependent on a job or an employer to be covered
What's the downside to individual health insurance?
The biggest downside is you may be excluded for a pre-existing condition. That's what COBRA is for.
Secondly, you may have to change doctors. If you want an individual plan that includes your doctor, simply ask you doctor which plans he or she participates in. It's usually not hard to find a plan that allows you to keep your own doctor.
Where can I learn more about COBRA alternatives?
For more information and to learn how to get a free quote, go to COBRA Insurance Alternative. [http://www.squidoo.com/cobrainsurancealternative]
COBRA is a 1985 law that allows you to continue your employer provided health plan if you are terminated or laid off or if you are separated from a spouse who is a covered employee. Children of covered employees are also eligible under certain circumstances.
Can all employer plans be converted to COBRA plans?
No. The following plans are not covered:
1) Small employer plans: companies with fewer than 20 employees.
2) The Federal Government's Group Health Plan: there is another, separate plan for Federal workers.
3) Church plans: certain church plans are not covered under COBRA
Who should take COBRA?
You should absolutely take COBRA if you or a covered member of your family has a preexisting condition. The greatest benefit to continuing coverage through COBRA is the benefits are guaranteed. As long as you are eligible, you cannot be turned down.
Is there any reason NOT to take COBRA?
1) COBRA plan premiums are usually very high. Remember, while you were working your employer was probably paying at least part or maybe even all of your insurance premium. Under COBRA, you pay the entire amount, your part and the part your employer was paying. On top of that, there could be an additional 2% administrative fee.
2) COBRA is only temporary. It's designed to last only eighteen months or thirty-six months with an extension.
Doesn't the government supplement part of the cost of COBRA?
Yes, there is a provision of the stimulus package that provides a 65% subsidy for COBRA premiums that is available to individuals who have lost coverage as a result of an involuntary termination of employment between September 1, 2008, and December 31, 2009.
Keep in mind,this subsidy is good only for nine months, after that you are responsible for the entire amount.
Couldn't I just enroll in my spouse's plan?
Yes, and this might be a good idea. A special law called HIPAA guaranatees that you and your children can enroll under your spouse's plan without regard to pre-existing conditions.
Beware. There are limitations. You and dependent children are eligible for special enrollment only if you each had health insurance when you previously declined your spouse's coverage. In addition, you must request special enrollment within thirty days of time you lost your own employer-sponsored health plan.
When should I consider an individual health plan?
Individual health plans are the best way to get the best health coverage value for your dollars by providing both cost savings and tailored coverage. It's important to remember that an individual plan might not work for those with pre-existing health conditions.
What's good about having individual health insurance?
1) Will usually offer more affordable monthly premiums
2) It will provide the best value for a health insurance dollar
3) Coverage can be customized, you might not need to be paying for the vision or dental plan offered by your old employer plan
4) The plan is mobile, it goes where you go and you aren't dependent on a job or an employer to be covered
What's the downside to individual health insurance?
The biggest downside is you may be excluded for a pre-existing condition. That's what COBRA is for.
Secondly, you may have to change doctors. If you want an individual plan that includes your doctor, simply ask you doctor which plans he or she participates in. It's usually not hard to find a plan that allows you to keep your own doctor.
Where can I learn more about COBRA alternatives?
For more information and to learn how to get a free quote, go to COBRA Insurance Alternative. [http://www.squidoo.com/cobrainsurancealternative]
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