COBRA is the law that allows Americans who have recently lost or changed their employment to continue with the medical coverage that they have until they get coverage with a new employer. Usually COBRA will allow an individual or family member to keep their health insurance coverage for up to 18 months. This law helps many people who would be ineligible for coverage due to a health condition that they might have. The employee would not have to worry about applying for health insurance on the individual and family market where they may be declined for coverage due to their medical history or condition. If you have had a recent diagnosis or a history of a dread disease, COBRA is perfect for your needs.
One problem with going on COBRA coverage is the price. The plan that a former employee is eligible for is identical to the one that they have been using. That is good because the benefits that have been familiar to the employee will remain in place. You will not have to worry about having deductibles raised or co payments increased for doctors or prescription drugs. There is no difference in the coverage from when you were working until when you decided to enroll in COBRA. However the price may be a bit inhibiting.
America's medical system is set up so that employers can provide benefits to their employees to keep them happy and healthy. This is done through the tax code. While the COBRA benefits are not tax deductible to the individual, the insurance premium for the company is an expense for the company and treated as such for taxes. Since insurance companies know this, the low cost is not always the most important aspect of the plan. The owner and president of the company and their families would be on the same plan as well. So the plan may be benefit rich, but very expensive.
There are some plans that are available for people between jobs that are more affordable, but you will have to qualify for them based on your medical history. It is recommended that you consider making a change to a different plan if you are healthy to save money in your budget. However, if you do not qualify for another plan, then COBRA is always available to you. Short term health insurance plans are great for people who just need coverage for a few months in the event that they have a major incident that requires surgery, emergency room, or hospitalization.
The laws always change and if you are in the market for a change in your medical insurance status due to employment status, COBRA is something you can consider. If you have questions about how to enroll you will need to contact your human resources department for the paperwork and information on how each individual will need to implement your health insurance plan.
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