Cobra Insurance for Terminated Employees

Anyone who doesn’t know what COBRA insurance is probably has never been terminated from a place of employment. The only time when COBRA health insurance is available is when a person is terminated from their place of employment, after which they are covered for at least 18 months. COBRA insurance coverage has existed since 1985, when the Consolidated Omnibus Budget Reconciliation Act was signed into law. This applies to most companies that offer some sort of group health insurance coverage, but not in every case.

The COBRA health insurance is not always available to terminated employees; there are certain exceptions. The COBRA insurance law allows terminated persons to get health insurance for themselves and their family members at the group rate, but only if they were all covered during employment. COBRA health insurance can also be used during a change in employment status, including reduced hours. People who divorce an eligible employee can also qualify for COBRA insurance coverage.

Since COBRA insurance extends coverage for 18 months so terminated employees don’t need to worry about a change in their health insurance benefits, but it is not free. COBRA insurance coverage will be the same as the insurance provided when that person was employed, but they will be responsible for the payment of monthly premiums. It is possible, however, for COBRA insurance coverage to change if the employer changes their coverage to current employees.

It is important for people to remember that COBRA insurance is meant to be temporary, which is why it is usually only available for 18 months. In some cases people can apply for an extension, though. Once this cobra insurance coverage period expires, the terminated employee will find themselves without health insurance unless they make buy their own plan or get coverage from a new employer.

The fact that COBRA health insurance is temporary is one of the dangerous things about it, because that deadline can creep up on people. If a terminated employee gets very sick while they are covered by COBRA insurance and they can’t find new insurance they could be in big trouble. They may find it difficult to get future health insurance coverage if this illness is subsequently classed as pre-existing and is “uninsurable,” which is usually the case with serious and possibly terminal illnesses such as various cancers and AIDS.

Though there are limitation and drawbacks, COBRA insurance coverage is a resource that terminated employees should take advantage of, especially if they provide for their family. COBRA insurance should always be considered a very short-term solution, though. Terminated employees should immediately begin looking for new employment where medical benefits are offered.

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