Are you eligible for COBRA?
A federal law known as COBRA (short for the
Consolidated Omnibus Budget Reconciliation Act of 1985) provides a
vital bridge between health plans for qualified workers, their
spouses, and their dependent children when their health insurance
might otherwise be cut off. Because of that security, COBRA has been
hailed as a much-needed safety net for families in the midst of
crisis, such as unemployment, divorce, or death.
Under COBRA, if you voluntarily resign from a job or
are terminated for any reason other than "gross misconduct"
you are guaranteed the right to continue your former employer's group
plan as individual or family health care coverage for up to 18 months
at your own expense. In many cases, your spouse and dependent
children are also eligible for COBRA coverage, sometimes for as long
as three years. However, individual plans - that is, plans you buy on
your own, rather than through work or an association - are not
subject to COBRA law, and once you lose that coverage, you won't be
able to get an extension under COBRA.
For some, COBRA still proves elusive
The cost of the monthly premiums for COBRA can come as
quite a surprise if you're accustomed to you employer picking up most
of your health insurance tab via pretax paycheck deductions. When you
opt to buy COBRA, you must pay the full premium amount which can be a
hefty monthly sum even for group health coverage. For a family, you
can figure COBRA coverage is going to be $400 or $500 a month. For a
single person, you can expect to pay upwards of $200 a month.
For information on alternatives to COBRA visit our health