COBRA Eligibility and Caveats
Employees may lose their employer’s health insurance through many ways (Reiff 2018). However, depending on their eligibility, they can utilize the Consolidated Omnibus Budget Reconciliation Act (COBRA) program in order to temporarily keep using their former employer’s health coverage (“Don’t Worry, COBRA Doesn’t Bite Employers”; Reiff 2018).
People, such as “former employees, retirees, spouses, former spouses, and dependent children,” must meet certain requirements to use COBRA’s benefits (Reiff 2018). With COBRA, they can still visit the same in-network doctors and use coverage for services that may include “prescription drugs, dental treatments and vision care,” without worrying about preexisting conditions, depending on the health plan (Reiff 2018). Employees can use COBRA when they lose their employer’s health benefits due to “[voluntary] or involuntary job loss (except in cases of gross misconduct)” or “[decrease] in the number of hours of employment…” (Reiff 2018). The employee’s spouse can also use COBRA when the employee “[becomes] entitled to Medicare,” becomes divorced or legally separated from his or her spouse, or passes away (Reiff 2018). If the spouse’s aforementioned events occur, dependent children can also utilize COBRA (Reiff 2018). If the children grew up and cannot be dependents on the plan anymore, they can use COBRA until finding another plan (Reiff 2018). With continued coverage, employees can remain assured that they and their family can pay for their medical bills (Cartwright).
Though, COBRA plans are expensive, can change, and are only temporary. While people may pay less for COBRA plans than some individual health plans, they can be pricey because they are responsible for the whole premium instead of the employer and possibly “an extra 2% towards administrative charges” (Reiff 2018). Though, based on the American Recovery and Reinvestment Act of 2009, people can have decreased rates of “65% for up to 9 months of coverage. The remaining 65% of the payment is covered by the former employer through a payroll tax credit” (Reiff 2018). People also must accede to any good or bad changes their former employer makes to the health plan (Reiff 2018). They must even accept losing COBRA coverage if their former employer drops the plan (Reiff 2018). They can also lose COBRA when they do not “pay premiums in time,” “[become] eligible to Medicare benefits,” “[engage] in misconduct (such as fraud),” or “move out of state or out of the coverage area…” (“COBRA Insurance Pros and Cons”; Reiff 2018). Also, it usually lasts 18 months, but it can last longer “if any one of the qualified beneficiaries in the family is disabled and meets certain requirements, or if a second qualifying event occurs,” such as the employee’s death, “a loss of dependent child status under the plan,” and more (Reiff 2018). People must enroll into another health plan before COBRA expires but getting a job with benefits could be challenging “[in] times of economic downturn” (Cartwright).