Do you want to know what is cobra health insurance? It’s time to explore complete details. COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act. It’s a kind of health insurance where eligible employees and their dependents can obtain continued health insurance benefits if an employee loses his job or reduced work hours. An employer with more than 20 full-time employees must have to take a COBRA Health program.
How Does It Work?
Employers having more than 50 employees must have to provide health insurance coverage for a group of employees and thereby they are liable to pay premiums. Many times, an employee becomes ineligible to enjoy the benefits of health insurance from an employer. The main reason is that either he is laid off, or his working hours have dropped down from the minimum threshold per week. In that case, an employer is not liable to pay a premium. Thereby, COBRA allows an employee to pay a health insurance premium and enjoy the same health insurance coverage and benefits as other eligible employees.
An employee needs to pay for this health insurance plan on his own to retain all the benefits. The cost of this premium is high. However, when a person compares this health coverage plan with that of individual health insurance premiums, he realizes that COBRA is less expensive.
Under COBRA health programs, previous eligible employees, their dependents, former spouses, and spouses must get the same group rate and continued health insurance coverage. An employee needs to decide whether he wants to avail of the opportunity of continued coverage within 60 days.
Benefits of COBRA Coverage
Suppose an existing employee decides to continue with COBRA’s continued coverage. In that case, he doesn’t need to look around for a new physician because he would continue with the same medical plan. Therefore, he can take his family to the same physician, no need to make any changes. If you are using a regular drug or getting treatment for a medical condition, everything will continue as it was before. It’s better to stay insured and know that you don’t have to pay a hefty medical bill all by yourself.
Downside of a COBRA Plan
There is a problem with COBRA that the whole health plan is dependent on the employer. That means if he makes changes in the program for an eligible employee, then an ineligible employee has to accept these changes. In case the employer terminates this plan, then you also lose the full coverage. Finally, you know what is COBRA health insurance? Do you want to go for it?
