Daniel Stewart

Are Cobra Benefits Worth Getting?

Employer-sponsored health insurance is the most common way that Americans get coverage. While policies can vary, getting health insurance through your company is a great way to get the right plan for your family while splitting premium costs with your employer. But what happens if you suddenly lose your job?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) went into effect in 1986, giving workers the right to continue receiving group health benefits from an employer-sponsored plan for a short time after losing their jobs.

How COBRA Coverage Works

There are specific rules to get COBRA benefits. First, you must experience a qualifying event. Typically, being laid off or terminated qualifies you for coverage. The exception is if an employer severs a relationship with an employee due to "gross misconduct." Families of employees can also get COBRA benefits after a divorce or death of the primary beneficiary.

How Long Does Coverage Last?

Coverage can vary based on the qualifying event that caused an employee to lose their job. However, it's usually up to 18 months. During that period, you must continue paying premiums.

The 18-month coverage period can be longer. An 11-month extension is available to those who are disabled or become disabled within the first 60 days of COBRA eligibility.

Should You Get COBRA?

The Consolidated Omnibus Budget Reconciliation Act was a game-changer when first signed into federal law, and it continues to be a great option for many. There are many advantages to getting COBRA benefits.

First, it can help you save on out-of-pocket costs. Switching from an employer-sponsored group benefits plan to private insurance can be dramatic. Standard private healthcare tends to come with higher premiums, so having COBRA buys you time and lets you continue experiencing those savings.

Secondly, you typically get better benefits. Employer-sponsored plans have broader networks than non-group plans, making it a suitable choice if you own a second home or travel out of state.

Finally, COBRA coverage bridges the gap until you find a replacement plan. You never know when you'll need insurance, so having this coverage as you shop around and explore other options can make a big difference.

Author Resource:-

Daniel Stewart has been helping people with their money management and personal finance with over 15 years' experience in business finance. You can find his thoughts at health investment blog.