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Insurance 101

COBRA Health Insurance Alternatives


COBRA (Consolidated Omnibus Budget Reconciliation
Act of 1986)

A law that permits individuals to continue coverage temporarily under most employer health insurance plans when they would otherwise lose eligibility due to a loss of employment or a change in family status (such as divorce). The cost of this continued coverage is paid by the employee or dependent who elects it. Small employers, those with less than 20 employees, are generally not subject to COBRA.

If you are worried about losing your job and health insurance, or if the cost of insuring your children and other dependents has grown too great, click here to view the individual health insurance quotes that might be right for you.

If you are losing your job, you may not have to stay with your past employer's insurance plan. Potentially, this could allow you to get into an individual health insurance plan of your own.You could find an affordable medical insurance plan that you own, that is easy to administer, and one that fits your needs.

Help!  I just lost my job, and with it, my health insurance.  My employer says I am eligible for COBRA, what is that?

Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a law that requires employers to offer employees continuation of their health insurance coverage when they have lost their jobs.  COBRA is temporary, usually between 18 to 36 months, varying from state to state.

Under COBRA, what will I pay for health insurance?

If you have COBRA insurance, you will receive no contribution from your former employer, so you will pay 100% of the monthy premiums for your plan. You may additionally be charged as much as 2% for administrative fees.  As you can see, this could be very costly as employer or group plan rates for health insurance are much more expensive than individual rates.

Disadvantages to COBRA?

COBRA is not only costly, but it is also temporary. The and longer you are on it, the greater risk that you run of developing an illness or condition that will be labeled pre-existing to future health insurance applications.  Pre-existing conditions could make it difficult for you to get health insurance when your COBRA runs out. 

If I get my own individual insurance, can I keep my same doctor?

Most likely.  The vast majority of doctor’s networks are the same and accept a wide variety of plans, allowing you to keep your same doctor.

My work no longer pays the cost of insuring my dependants.  Should I pay for their insurance through my employers’ plan, or is it better to get them an individual plan? 

Typically, it is better to get dependants each an individual plan that stays with them as they grow, move on to college, enter into jobs of their own.  The rates for an individual plan over your employers’ group plan could be as little as half of what you pay now, and there is no minimum age for insuring each dependant.

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