COBRA Alternatives May be Necessary if COBRA Eligibility is in Question

are certain eligibility requirements that must becoverage when they lose a job. When anyone
met in order for a person to qualify for COBRAfaces a job loss, a divorce, a reduction in work
benefits. The Consolidated Omnibus Budgethours, or a death of a covered sponsoring
Reconciliation Act was enacted by Congress toemployee, they may be eligible for extended
protect people from losing health insurance due tocoverage under the employer’s group
the loss of a job, the death of a sponsoringhealth plan for up to 18 months due to COBRA
family member, a divorce, the death of thelegislation. COBRA is the Consolidated Omnibus
sponsoring family member, and other life alteringBudget Reconciliation Act adopted by Congress to
events that are deemed eligible.ensure that eligible people can continue to have
Usually, if a person leaves a job, they have theaccess to their employer sponsored health care
right to purchase health insurance on the groupplan.
plan sponsored by their employer for up to 18Health insurance is complicated. That is why
months, due to the provisions of the law underinsurance agents must study to pass a rigorous
COBRA. The employer is required to notify theexam before they can become licensed to sell it.
former employee of the cost of their insuranceMost people never read their insurance policies
premium in writing. Employers also give a verbaland do not understand when their employers
explanation at the exit interview.explain about their rights under COBRA. They
There are some cases where people find out thatmake many mistakes that can be very costly.
they are not eligible to receive extended healthHere are a few common mistakes to avoid:
benefits under COBRA provisions. The people·People do not ask questions when they
affected are unpleasantly surprised when theydo not understand some detail about their rights
discover their status, if ineligible. If a personunder COBRA. They may feel embarrassed or
discovers he or she cannot receive benefits underintimidated about the thought of asking questions.
COBRA, there are other options that are availableNo matter how stressful it may seem,
and they must act quickly because time is of theunderstanding their rights is a high priority.
essence. Most insurance companies will not coverEveryone should ask as many questions as they
pre-existing conditions if there is a break inneed in order to make an informed decision about
coverage of more than 60 days, so it ishealth insurance.
important that if a person is recently separated·People assume their former employer
from their job that they contact a healthcontinues to pay for health insurance. Nothing
insurance agent so they can understand all ofcould be further from the truth. Anyone who
their options.participates in health insurance under COBRA pays
Here are a few of the situations that cause102% of the insurance premium.
people to be ineligible for benefits under COBRA:·People often think they do not need
·The law only requires companies withhealth insurance. The reasons vary. Younger
over 20 employees to provide benefits under thepeople think that since they are healthy, health
laws governed by COBRA. Employees who workinsurance is an unnecessary expense. Others think
for companies that have fewer than 20they will find a job quickly. Not all employers
employees are not eligible for benefits underprovide health care coverage and these days,
COBRA. If they leave their job or are terminated,new jobs are hard to find. The lesson here is that
they lose benefits at the end of the specifiedyoung people do get sick, and it is a mistake for
coverage period. In most cases, coverage endspeople to assume that all employers will provide
at the end of the month the employee ishealth insurance.
terminated. People who fall into this category need·People do not seek the help of an
to contact a private health insurance agent asinsurance professional. Paying for benefits under
soon as possible to purchase an individual policy.COBRA is expensive. Insurance agents have a
·Many companies in this economic crisisnumber of options to fit the differing needs of
are doing everything they can to eliminateindividuals and families. They can do a health
expenses. Health insurance coverage forinsurance comparison that will contrast the
employees is a big expense for businesses.benefits and costs to the person.
Employees should be aware that their company·Sometimes, people get the wrong idea,
could cut health insurance benefits or eliminatethinking that everyone qualifies for benefits under
them altogether. If that happens, the employee isCOBRA. That is not the case. The law specifies
not eligible for benefits under COBRA.eligibility requirements. If an employer drops health
·Sometimes, people who are paying forcare benefits, employees are not entitled to any
continued health insurance benefits lose theirprotection under COBRA. This mistake goes back
eligibility when they miss a payment. The lawto assumptions. People should never make
states that if people fail to pay for their coverageassumptions, but should instead ask questions to
at any time, they can lose their eligibility status.find out if they are qualified.
Although COBRA requires the insurance companyHealth insurance agents work on behalf of the
to send out a cancellation notice when a personperson buying insurance. They can offer
misses a payment, people do not always see theconsultations that help people understand all of
warning letter. That is why it is imperative fortheir options in relation to health care coverage.
people to watch for any notices from theirThey often have access to Blue Cross/Blue
insurance company.Shield, Aetna health insurance plans, and plans
COBRA Alternatives—Five Mistakes Peopleoffered by other companies. Their expertise can
Makeaid people in making the right decisions about the
There are COBRA alternatives. People often dohealth insurance needs.
not understand their options for health insurance