There's a lot of confusion when it comes to COBRA. What are the benefits, and who is eligible?
COBRA stands for Consolidated Omnibus Budget Reconciliation Act, but that doesn't make it any easier to comprehend.
These are the simple facts about COBRA.
* COBRA applies only to group coverage on plans for companies with 20 or more employees. If your coverage is through a smaller group, or if you have an individual policy, COBRA does not apply to you.
* COBRA protects individuals from losing group coverage under very particular circumstances. If the impending loss of a job, divorce, or death of spouse puts your group coverage in jeopardy, you are eligible for COBRA benefits.
* To get the ball rolling, simply inform your plan administrator of the qualifying event and date. You will receive the necessary paperwork to elect COBRA coverage.
* The benefit? During the COBRA period, you are entitled to continuation of coverage at group rates. In general, this will be a better rate than you would receive on an individual policy. However, you are required to pay 100 percent of the premiums. If the group premiums rise, so will yours.
* The continuation of group coverage is for a limited time period. If coverage was discontinued due to the loss of your job, or your spouse's job, group coverage will end after 18 months. If you lost your group plan due to divorce, legal separation, or death of covered employee, group coverage will end after 36 months.
* Coverage will end if the former employer ceases to offer a group health plan. Likewise if you become eligible for another group plan.
COBRA offers limited protection after losing group coverage. Before this benefit runs its course, you should be researching individual health insurance policies if you still do not qualify for a new group plan.
As someone who has, unfortunately, had to take advantage of COBRA, I can honestly say that it was easy to apply. During my benefit period, I did see my rates rise dramatically, along with the rest of the group, but it was still a much better rate than for individual coverage.
As that coverage was ending, we began the search for an individual plan. That's where the red tape, rejections, and sticker shock began. If you have multiple sclerosis and are eligible for COBRA, I strongly urge you to elect coverage immediately. It won't solve all your financial problems, but it will, at the very least, delay your need to apply for individual coverage.
COBRA is a welcome protection, as far as it goes, but we still can do better. Maybe I'm asking a lot, but I would love to see group coverage made available that does not have to be tied to the workplace. That would go a long way for people with disabilities, who are doing their very best to stay afloat. Washington, are you listening?
Share your COBRA experience or ask questions here.
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