Cobra health insurance is an affordable option for getting health insurance after you have lost your job. Currently, almost half of all Americans get their health insurance from their employer and losing that coverage can be problematic.
When an employee gets laid off or quits their job, they have the option to get help from the Consolidated Omnibus Budget Reconciliation Act, or COBRA coverage.Keep reading to learn more about COBRA insurance and how it can protect you with health insurance coverage after you lose your employment.
Based on federal requirements, companies with 20 employees or more and all state and local governments are required to provide a group health plan to their employees. Additionally, these employers are required to offer COBRA insurance coverage to their employees, the employee’s spouses, former spouses, and their dependent children after employment has been terminated.
Some of the reasons for termination of employment that are covered by COBRA include:
- The death of an employee covered by a group insurance plan
- When an employee is terminated or had a reduction of their hours for a cause other than misconduct
- Divorce or legal separation from an employee that is covered by a group insurance
- When a covered employee becomes eligible to receive government insurance through Medicare.
- An employee’s child no longer holds a dependent status.
If an employee becomes bankrupt, eligible beneficiaries may still receive healthcare coverage. This includes retired employees, their spouses, and any dependent children. Additionally, children born in or placed for adoption with an employee that is covered by COBRA insurance will automatically be eligible to become a beneficiary.
Major life changes such as divorce, legal separation, new eligibility for Medicare, or a child losing their benefits as beneficiaries must be noted with the Human Resources department or whoever manages employee benefits. Typically, employees are required to give notice within 60 days.
Here are a few situations where employees are not covered by COBRA insurance:
- Companies that employ less than 20 employees.
- Employees that work at companies that do not offer health insurance coverage as a benefit.
- Employees who are terminated due to gross misconduct such as violence or theft.
- Employees working for the federal government
- Employees working at organizations related to a church
There are a few states with laws that work as alternatives to COBRA health insurance for employees working at small businesses. Contact your state insurance commissioner’s office to determine what unemployed insurance benefits you may be eligible to receive. These policies are required to match the policy you are receiving from your current employer. However, employees will have to pay the COBRA insurance cost if they want to have coverage.