How to Understand COBRA

If you are employed and your employer offers insurance coverage than you have probably heard of COBRA. COBRA stands for Consolidated Omnibus Budge Reconciliation Act. This is a law that requires employers with more than 20 employees to provide health insurance for their employees, and their dependents. You are eligible for up to 36 months of continues coverage. Keep in mind that in order to continue your coverage you must pay the entire premium without any help from your previous employer.

Of course this coverages is only available when you lose coverage because of loss of employment. When it comes to qualifying for COBRA benefits there are very specific criteria that have to be met. For example in order for an employee to qualify they need to have lost their job either voluntarily or involuntary. Also the reason for loss of employment can not be because of misconduct. The other option is the reduction in the number of hours of employment.

When it comes to your spouse and children there are different qualifications for them. You should make sure that you read through all of your paperwork that you receive thoroughly. You will usually receive a COBRA packet in the mail shortly after your employment has been terminated. In order to be eligible for continued coverage under COBRA, you must have been enrolled in your employer’s health plan when you worked for them.

The process that most individuals must follow to elect continuation coverage is as follows: They first need to notify the plan administrator of the event that qualifies them within 30 days after an employee’s death, termination, or reduced hours of employment. If it is a divorce or legal separation or if your child is no longer covered under your plan then you have up to 60 days. Once you receive the necessary paperwork you will have 45 days after electing coverage to pay the initial premium.

When you are ready to file a claim for benefits with COBRA you must properly complete all of the paperwork and follow all of the procedures that were outlined for you in the plan rules. Also if you are disable you can extend the 18 month period of continuation coverage, as long as you qualify. Once again the best thing to do is make sure that you review all of your paperwork thoroughly. If there is anything you do not understand be sure to call the contact number that should have been included in your COBRA packet.