COBRA Alternatives May be Necessary if COBRA Eligibility is in Question

There are certain eligibility requirements that must be met in order for a person to qualify for COBRA benefits. The Consolidated Omnibus Budget Reconciliation Act was enacted by Congress to protect people from losing health insurance due to the loss of a job, the death of a sponsoring family member, a divorce, the death of the sponsoring family member, and other life altering events that are deemed eligible.

Usually, if a person leaves a job, they have the right to purchase health insurance on the group plan sponsored by their employer for up to 18 months, due to the provisions of the law under COBRA. The employer is required to notify the former employee of the cost of their insurance premium in writing. Employers also give a verbal explanation at the exit interview.

There are some cases where people find out that they are not eligible to receive extended health benefits under COBRA provisions. The people affected are unpleasantly surprised when they discover their status, if ineligible. If a person discovers he or she cannot receive benefits under COBRA, there are other options that are available and they must act quickly because time is of the essence. Most insurance companies will not cover pre-existing conditions if there is a break in coverage of more than 60 days, so it is important that if a person is recently separated from their job that they contact a health insurance agent so they can understand all of their options.

Here are a few of the situations that cause people to be ineligible for benefits under COBRA:

·The law only requires companies with over 20 employees to provide benefits under the laws governed by COBRA. Employees who work for companies that have fewer than 20 employees are not eligible for benefits under COBRA. If they leave their job or are terminated, they lose benefits at the end of the specified coverage period. In most cases, coverage ends at the end of the month the employee is terminated. People who fall into this category need to contact a private health insurance agent as soon as possible to purchase an individual policy.

·Many companies in this economic crisis are doing everything they can to eliminate expenses. Health insurance coverage for employees is a big expense for businesses. Employees should be aware that their company could cut health insurance benefits or eliminate them altogether. If that happens, the employee is not eligible for benefits under COBRA.

·Sometimes, people who are paying for continued health insurance benefits lose their eligibility when they miss a payment. The law states that if people fail to pay for their coverage at any time, they can lose their eligibility status. Although COBRA requires the insurance company to send out a cancellation notice when a person misses a payment, people do not always see the warning letter. That is why it is imperative for people to watch for any notices from their insurance company.

COBRA Alternatives—Five Mistakes People Make

There are COBRA alternatives. People often do not understand their options for health insurance coverage when they lose a job. When anyone faces a job loss, a divorce, a reduction in work hours, or a death of a covered sponsoring employee, they may be eligible for extended coverage under the employer’s group health plan for up to 18 months due to COBRA legislation. COBRA is the Consolidated Omnibus Budget Reconciliation Act adopted by Congress to ensure that eligible people can continue to have access to their employer sponsored health care plan.

Health insurance is complicated. That is why insurance agents must study to pass a rigorous exam before they can become licensed to sell it. Most people never read their insurance policies and do not understand when their employers explain about their rights under COBRA. They make many mistakes that can be very costly. Here are a few common mistakes to avoid:

·People do not ask questions when they do not understand some detail about their rights under COBRA. They may feel embarrassed or intimidated about the thought of asking questions. No matter how stressful it may seem, understanding their rights is a high priority. Everyone should ask as many questions as they need in order to make an informed decision about health insurance.

·People assume their former employer continues to pay for health insurance. Nothing could be further from the truth. Anyone who participates in health insurance under COBRA pays 102% of the insurance premium.

·People often think they do not need health insurance. The reasons vary. Younger people think that since they are healthy, health insurance is an unnecessary expense. Others think they will find a job quickly. Not all employers provide health care coverage and these days, new jobs are hard to find. The lesson here is that young people do get sick, and it is a mistake for people to assume that all employers will provide health insurance.

·People do not seek the help of an insurance professional. Paying for benefits under COBRA is expensive. Insurance agents have a number of options to fit the differing needs of individuals and families. They can do a health insurance comparison that will contrast the benefits and costs to the person.

·Sometimes, people get the wrong idea, thinking that everyone qualifies for benefits under COBRA. That is not the case. The law specifies eligibility requirements. If an employer drops health care benefits, employees are not entitled to any protection under COBRA. This mistake goes back to assumptions. People should never make assumptions, but should instead ask questions to find out if they are qualified.

Health insurance agents work on behalf of the person buying insurance. They can offer consultations that help people understand all of their options in relation to health care coverage. They often have access to Blue Cross/Blue Shield, Aetna health insurance plans, and plans offered by other companies. Their expertise can aid people in making the right decisions about the health insurance needs.