COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federally protected law that was created to provide coverage for employees and their immediate families with temporary continued access to their employer sponsored group health insurance benefits when such access will otherwise be terminated.

COBRA is an option worth considering when the loss of coverage is unthinkable, but for others the high cost of premiums and the temporary nature of COBRA make it an unappealing solution.

Many will find that individual health policies or short term health insurance plans work best. In order to determine if COBRA is right for you, it is important to fully understand what COBRA offers. Once you have an understanding of how COBRA works, compare your other options to find what best suits your medical and financial needs.

COBRA was designed to provide temporary continuing coverage for employees, their spouses, ex-spouses, and dependent children. It does not apply to everyone though, and eligibility does have limitations.

You may be eligible for a COBRA plan if: you are currently or were recently (within 60 days of leaving the workplace) employed by a company that had more than 20 employees and offered group health insurance at the time of the 'qualifying' event. A 'qualifying' event for a COBRA plan is one in which the life or employment situation of an individual changes in a way that causes an individual's coverage to be terminated. These events include:

Termination of employment (death, retirement, dismissal, resignation)
Reduction of working hours
Divorce (spouse)
Loss of ¨dependent¨ status (child)

COBRA plans offers health coverage to a terminated employee for a maximum of 18 months, depending on your qualification, and the family of an employee for up to 36 months. They provide the same benefits as the initial group health care policy. It is important to understand that COBRA only covers medical insurance, and does not include life insurance or disability coverage.