COBRA - WHAT IS IT FOR HEALTH INSURANCE?

Health insurance clients always ask about COBRA.

COBRA is actually a federal law that allows an employee to keep his or her health insurance for up to 18 months after leaving a job. Almost all employees of group health insurance who are terminated from their job, are protected under COBRA. You can keep your group health insurance if you are quit, and you can usually keep it if you are fired or laid off. In certain cases, for gross misconduct, you may not have COBRA protection - but most people do.

People ask why COBRA health insurance costs so much. COBRA costs whatever the health insurance cost, plus a 2% administrative fee. This means the total is about equal to your employee contribution plus whatever the company contributed to the premium dollar. Many people are not aware how much the company helped pay for their health insurance, and that's why people think that COBRA is expensive.

Not all employers are subject to COBRA, and you will need to find out from your employer.

If you have the option to use COBRA after leaving a job, you have a lot to consider. The premiums may seem higher than an individual plan, and that's because individual plans will underwrite each case - and can offer better rates to health individuals. However, some people may have pre-existing conditions that will get excluded under individual health plans. Some people may also have health conditions that make them uninsurable. This will vary by state, and some states have risk pools. However, health insurance risk pools also have rules, and you may not be eligable if you can elect to keep your COBRA coverage.

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