Understanding your COBRA insurance benefits can be difficult. This brief article explains your rights in simple terms, and explains your options in the event your COBRA benefits kick in.
Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA) in the 80's to regulate the continuation of health care coverage rights for employees.
COBRA benefits kick in when any of the "qualifying events" listed below occur:
1. You lose your job...
2. Your hours are cut by your employer, so you no longer qualify for their employer-sponsored plan...
3. You get divorced and you are no longer eligible to receive insurance through your spouse's employer as a dependent...
4. An employee becomes eligible for Medicare benefits...
5. A dependent child reaches the age at which they are no longer eligible for dependent coverage...
6. Your employer files bankruptcy.
If any of the above happens, your employer is required by law to notify you as to what your rights under COBRA are within 30 days.
So, what are your rights? Primarily, you have 60 days from the date the "qualifying event" occurred to exercise your right to continue the coverage you were receiving from the employer.
You can continue those benefits up to 18 months from the qualifying event. The downside is that you have to pay 100% of the employer's costs to provide the coverage, plus a 2% administrative fee. The cost averages around $700.00 a month for an individual, and $1,400.00 a month for a family.
When you think about how much it costs to continue coverage under COBRA, it's no surprise that few people choose to do so.
However, there is hope... If you are healthy and have no preexisting medical conditions, you will most likely qualify for a low-cost health insurance plan from one of the many Texas health insurance companies that offer coverage to individuals and families.
In fact, you may be surprised to discover that an individual or family policy is likely to cost much less than your employer-sponsored coverage.
For example, in 2004 the average monthly premium for an individual health insurance policy for a healthy 33-year-old Texan was just $133. Compare that to the nationwide average monthly premium for the same period of almost $308.00 a month, and you can see how shopping for your own insurance plan can save you a lot of money.
Now, even if you aren't healthy and have a preexisting medical condition, you can still get guaranteed coverage from the Texas State Health Insurance Risk Pool. It's going to cost you, though... probably more than $350.00 a month. However, that's a cost many of us would be willing to bear, if we knew it was our only choice for coverage for ourselves or a loved one.
I sincerely hope this article has helped you understand what your COBRA insurance benefits and rights are in Texas. If you need more information or assistance with choosing an individual or family health insurance plan, feel free to contact me at my website.
