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• What COBRA really is, and how it can affect an employee leaving his or her job 

 
COBRA is a health insurance benefit program enacted by the federal government in 1985. Employees who leave their job voluntarily or for any reason other than gross misconduct, spouses of these employees, dependent children of these employees and disabled persons are entitled to COBRA Health Insurance under the law.

Between the beginning of the current recession in December 2007 and November 30, 2008, there have been more than 20,700 mass layoff events in the U.S. Each of these actions resulted in 50 or more layoffs. During this recession, more than 2,100,000 Americans have initiated new claims for unemployment insurance. The unemployment rate in the state of California now exceeds 8% while the national rate is expected to approach 7% in January. These facts emphasize the need to be aware of the rights provided by COBRA.

All Americans are aware of the rising cost of health care and health insurance. The shock of potentially losing health insurance is a devastating consequence of the recession. Unfortunately, many Americans do not understand their rights under COBRA.

One of the important rights assured disenfranchised employees by COBRA is that employers are obligated to notify departed workers of their COBRA Health Insurance rights within 30 days of employment termination. Employers who violate this obligation can receive severe fines and penalties. If the employee, spouse or dependent exercises their right to COBRA Health Insurance, neither the health insurance provider nor the employer is mandated to notify the Employee of premiums that are due.

For COBRA to work properly the employer and the employee must follow defined procedures. Once notified of the availability of COBRA Health Insurance, the insured has 60 days to continue their existing coverage. The employee must notify the plan administrator of their decision. The employee, their spouse and the dependents are entitled to the same coverage that was in place at the time of the employee’s departure.

COBRA is also available in cases of divorce and legal separation or when a child loses dependent status. In these cases, the employee must notify the plan administrator within 14 days of the event to qualify for COBRA Health Benefits. When an employee dies, the employer has 30 days to notify the plan administrator, who, in turn, must make sure that the covered dependents are aware of their access to COBRA Health Insurance.

Once the insured elects to receive COBRA Health Insurance, they have 45 days to make the first payment. Benefit recipients have the right to pay monthly premiums. If an employer has been contributing to the health insurance premium, many employees are startled by the cost of coverage. However, there are valid reasons and circumstances to continue health insurance through COBRA for the 18 month time frame.

A significant benefit of COBRA Health Insurance is the continued coverage for pre-existing conditions that may well be excluded from new coverage. With the cost of health care today, coverage for pre-existing conditions usually outweighs the increased premium cost. These conditions are covered for the entire 18 month eligibility duration of the COBRA Health Coverage.

Many displaced employees and their families are comfortable with and knowledgeable about their current policy. These employees are understandably hesitant to change the coverage to which they have become accustomed.

In the current economic climate, large and small companies are taking a hard look at health insurance. Every company seeks to reduce costs and employer contributions are bound to shrink. Workers who are between jobs may find it difficult to find a job with immediate health benefits. COBRA was enacted to help bridge the gap between jobs and coverage. Contact a COBRA professional and make sure you understand what COBRA Health Insurance can do for you and your family.

George L. Fox, LUTCF, serves as Vice President of Planning Financial Futures, Inc. He is a lifetime resident of Long Island and lives in Huntington with his wife, Vicki, and their three children. George is a graduate of the State University of New York, NYIT and the College for Financial Planning.

Source: http://www.cobrahelpcenter.com

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