What you need to know about your Cobra Rights

COBRA can be a life support when an employee loses,changes jobs or takes an extended medical leave from work. There are certain health situations such as present medical conditions or pre-existing conditions where a person must have insurance. In those instances we are placed at risk if we let allow our insurance coverage to lapse. COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985 gives employees an option for employees or ex-employees to continue the group health insurance when employees leave a job.

The insurance coverage, under COBRA, is composed of the identical plan an employee had while under the employers group health coverage. A third party administrator collects payments for the insurance company and assists all parties involved in administration duties such as remaining in compliance with federal guidelines. COBRA is a Federal Law and not an insurance carrier.

Coverage is effective the day after your group health benefits are terminated providing the insurance premium payment is received on time. There is a grace period also. The length of the coverage is from 18 to 36 months.

Payments are made to the administrator. (not the insurance carrier, not COBRA)

Insurance claims go directly to the insurance carrier.

It is up to the individual to make sure his/her application is in order and sent to the administrator and he is responsible for claim getting filed. That may mean calling the medical provider’s office to see if they will file the claim as they do in other insurance claim submissions.

The cost of COBRA? I did not find cost guidelines. Here is an typical example of an HMO insurance plan and the cost of continuing that identical group coverage under the COBRA law. Anyone who tells you that the cost is the same as before, probably never has received a letter from the administrator detailing the cost of insurance under COBRA. I personally could not afford to take the COBRA option.

Plan HMO: Coverage: Medical: XYZ Insurance Company:
Group coverage while employed: $75.00 per month. Cost with COBRA: $345.00 per month.

As with any offer or plan, there is a choice involved on whether COBRA is the best choice. Some employers may offer an alternate health plan but the employee may lose rights under the COBRA law if he selects the alternate health plan. It is always in your best interest to ask plenty of questions with regard to insurance plans.

Having worked with insurance claims, I can testify that insurance plans are becoming more and more complex and even those who work with them on a daily basis have frustrations deciphering the details of insurance plans.

This article is not intended to be advice on health coverage. If you have questions, please seek professional advice.

For more information go to the US Dept of Labor web site.