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August 9, 2010

Introduction to COBRA Health Insurance

What Is COBRA?

COBRA is a temporary extension of your participation in your employer's health insurance plan at your own cost. The program takes its name from the Consolidated Omnibus Budget Reconciliation Act. For people with a pre-existing medical condition, it may be a good choice given that you cannot be denied COBRA coverage because of your medical history. However, COBRA insurance can be very expensive so comparing your COBRA and non-COBRA health insurance options is highly recommended.

Eligibility & Qualifying Events

People who are eligible for COBRA coverage have the option of continuing their employer-sponsored health plan for a limited period of time. COBRA requires three requirements be satisfied for COBRA coverage eligibility: 1) your employer is obligated to provide COBRA coverage; 2) you are a qualified beneficiary; and 3) a 'qualifying event' has occurred.

The below table demonstrates the qualifying events for employees, the spouses of employees, and dependent children:

Employee
  • If you leave your job voluntarily (including retirement)

  • If your hours at work are decreased resulting in ineligibility for health benefits under your employer's insurance policy

  • If you leave your job involuntarily for any reason other than gross misconduct
Employee's Spouse
  • If the work hours of the employee are decreased

  • If the employee discontinues employment at the job for any reason other than gross misconduct

  • If the employee becomes eligible for the Medicare program

  • If the spouse divorces or legally separates from the employee

  • If the employee dies
Dependent Children
  • If the dependent child loses dependent child status under the employer's health insurance plan

  • If the work hours of the employee are decreased

  • If the employee discontinues employment at the job for any reason other than gross misconduct

  • If the employee becomes eligible for the Medicare program

  • If the spouse divorces or legally separates from the employee

  • If the employee dies

Our parent company, eHealth, provides assistance comparing and applying for COBRA health insurance coverage.

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Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare and provide Medicare Part A and Part B coverage. Medicare prescription drug coverage is insurance run by an insurance company or other private company approved by Medicare. A Medicare Supplement plan is a health insurance plan provided by a private company that fills in the "gaps" in original Medicare coverage.