Continuing Coverage
COBRA – Congressional Omnibus Budget Reconciliation Act of 1985 – Designed as a safety net, to allow employees to extend their employers coverage while obtaining other coverage either through a new employer-sponsored plan, a spouse’s employer-sponsored plan, plans from the private market, or state-sponsored plans. Laid-off workers to continue to purchase the health coverage from their employer-sponsored plans for a defined period – typically 18 to 36 months.
Many find COBRA’S extended coverage too expensive, because you assume the portion of the premium that the employer had been paying.
COBRA might make sense when you …
- … are pregnant, or might be soon
- … have a pre-existing condition
- … are on prescriptions or need care soon
- … have been turned down for a private plan
But might not if you …
- … are in good health
- … find COBRA too expensive
- … need coverage beyond COBRA eligibility
- … need a cheap short-term plan between jobs
To help reduce cost, if you are ill stay on COBRA, but move other healthy family members to a lower-cost plan.
State Continuation
State continuation like COBRA applies to companies that have under twenty-five employees, but only allows you to retain group coverage for a period of three months.
Guarrantee Issue Coverage
After exhasting your state continuation or COBRA benefits you have the right to apply for a guarranteed issue plan that will cover you without having to prove evidence of insurability and it will cover all pre-existing conditions without any waiting periods. This coverage is very costly, but usually there are options to reduce cost by choosing a larger deductible, a smaller network of providers, or health coverage without prescriptions to make it more affordable.