If you are reliant on your employer for your health insurance, you are not alone. An estimated 156 million Americans, or close to half of the population, get their health insurance solely through their employer. While this can be good for some, it leaves many of us vulnerable.
If we lose our jobs, for whatever reason, we can suddenly find ourselves out in the cold with zero healthcare coverage. Fortunately, there is a safety net. This is where COBRA coverage options come in. This is a state-backed system that is designed to ensure that a lost job does not mean an end to healthy living. Read on to find out everything you need to know about COBRA as a stopgap coverage policy.
1. “Qualifying Events” Trigger COBRA Coverage
First off, it is worth coverage the policy benefits of COBRA and how you can actually enter a COBRA plan. If you lose your employer-funded health insurance because you have lost your job, COBRA kicks in. This allows you to continue on your employer’s health insurance plan for at least 18 months after your last day of work.
You will pay for your insurance, but you will get full access and benefits of that insurance plan, which will always be better than private, out-of-pocket insurance plans. In addition, divorce, death of a spouse, or eligibility for Medicare are all”qualifying events” that trigger a COBRA coverage plan.
2. Your Former Employer Can Still Stop Your COBRA
It is important to remember that, although you might have lost your job, your COBRA coverage is still tied to your former employer. This is because your COBRA policy will be an exact continuation of your existing employer-funded healthcare. If your former employer’s company collapses, there is no longer any plan to continue and your COBRA coverage will end.
3. You Might Not Be Eligible for COBRA Coverage
Just because you have lost your job does not mean you are automatically eligible for COBRA coverage. For example, a person who has been fired for gross misconduct may find themselves ineligible for COBRA coverage. Moreover, if you move outside of your COBRA plan’s “coverage area”, which is often your state of residence, you will also usually lose coverage.
4. COBRA Can Be Very Expensive
Some people have the misconception that COBRA is a free healthcare plan. This is not the case. You will be required to pay the costs of your COBRA plan in full, meaning that it can be very expensive.
However, the healthcare you will receive from the employer plan will be much better than what you could get for that price on the private market. It is therefore crucial that you consult insurance planning experts in your state to get COBRA medical insurance quotes that you can afford.
More Tips for Informed Healthy Living
Understanding how COBRA works will help keep you and your loved ones healthy and supported in the case of a crisis. For more essential healthy living hacks, we have got you covered. Make sure to consult our expert Lifestyle guides to learn more.