Is COBRA too Expensive?

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Published: 23rd November 2010
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When you stop working for an employer, they will probably offer you COBRA health insurance. COBRA Insurance allows you to keep the group health insurance contract that you had when you were employed.

COBRA health insurance is often the most cost-effective way to get coverage. However there are many circumstances where one can find less expensive coverage through an individual or family health insurance contract that is not connected with COBRA health insurance.

COBRA Insurance allows you to have medical insurance without any medical screening history. So long as you sign up for the policy during the election period and pay the monthly premiums on time you will be able to keep your insurance regardless of your medical history.

COBRA health insurance is only offered if you were enrolled in the group health insurance policy when you left your employer. If you were terminated for gross misconduct, your employer does not have to offer COBRA health insurance to you. If your employer has fewer than 20 employees COBRA medical coverage is not mandatory.

COBRA Insurance is temporary coverage. In most circumstances a former employee can only keep coverage for 18 months. In certain circumstances, you can keep COBRA for up to 36 months.

There are several circumstances that can cause you to lose your right to COBRA before you would lose your eligibility to COBRA Insurance. Failing to pay the monthly premiums on time will result in your being dropped from COBRA medical coverage. You can also be dropped if your former employer no longer offers a group health insurance plan to its current employees. You will lose the coverage if you accept a group health insurance policy that covers your any pre-existing conditions you may have. If you become eligible for Medicare your COBRA will end.

One of the shortcomings of COBRA health insurance is the fact that it is a short term policy. This means that when your eligibility ends you will have to apply for coverage through another plan. There is no guarantee that you will qualify then, so your COBRA medical coverage option can mean that you become uninsurable at some point.

If you have 18 months of eligibility for COBRA, you have 18 months where a sickness or an accident can render you medically uninsurable for your next health insurance contract. For this reason it may be advisable to apply for a insurance plan that you can keep long term as soon as your employment ends.

COBRA medical coverage is often twice the price than individually underwritten health care insurance policies. Insurance companies often base the rates they charge to groups largely on the claims that receive for that group. When you buy an individual or family contract, the rate will be based on the claims they expect to receive for you or you family.

This can result in a your being charged a much lower premium. If you and your family are in good health you will probably pay as little as half the price you would have paid for COBRA medical coverage.

You may find that the same health insurance carrier that provides group insurance to your employer will also insure you on a non-group basis. This can mean that you can tap into the same network doctors and hospitals if you switch to one of their individual or family policies.

You should explore your options with alternatives to COBRA health insurance whether even if are already insured by a COBRA medical coverage policy. You do not have to wait until your eligibility ends to switch. If get a coverage from another insurer, you can drop your COBRA at the end of the month.

COBRA Insurance is the best alternative for many. It may not be the best choice for you or your family. Be sure to get competitive health insurance quotes and look at COBRA alternatives. You might save two thousand dollars or more if you do.

You can find cheaper COBRA alternatives by getting free quotes for AZ health insurance or medical insurance in Connecticut on the author, Alston J. Balkcom's website.

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