Detailed COBRA Plan Background
The Consolidated Omnibus Budget Reconciliation Act passed in 1985 by the US Congress, is much better known as COBRA. This act was passed in order for employees to continue the coverage for them and their families in transition between jobs or after being laid off for a certain amount of time.
Who Qualifies For COBRA?
For you and your family to qualify for COBRA benefits after leaving or losing your job, there are a few factors that go into getting COBRA, for instance:
• If you work for a company with more than 20 employees you will have the option available through your employer’s group plan to continue coverage. City, state, and federal employees are covered by a similar plan • You must have voluntarily left your position, been laid off, or going on a leave of absence • Some other significant life change which prohibits you from continuing work to obtain your current employers health benefits
What Will COBRA Cost Me?
COBRA health coverage is designed to assist families who are currently on their employers group health plan, but sometimes isn’t the cheapest solution. For instance if you are paying $100 a month for health coverage with your current employer’s health plan you are more than likely paying around $30 out of pocket, while your employer covers the other $70. With COBRA you would be paying the full $100, plus the possible 2% fee for administering the benefits. In the long run though, COBRA turns out to be a lower cost alternative to getting an individual plan with the same coverage. Even though it has a higher premium, it’s only for a certain amount of time, giving you the coverage you’re used to with the benefit of allowing you to transition to your new job with benefits.