COBRA health insurance

COBRA (Consolidated Omnibus Budget Reconciliation Act) was instated in 1985 as a form of assurance for those that become unemployed and still need health coverage. When you are unemployed you will be unable to finance a health insurance plan. This will become a major concern for you and your family as it could lead to debt due to unexpected medical expenses. It is important to always have health care coverage for you and your family. If someone becomes unemployed and is no longer able to receive health insurance benefits then there is the option of applying for COBRA health insurance.

Once you become unemployed there will be many different things that you will be responsible for. You will need to begin working for new work, applying for those jobs, completing interviews, and more. During this time you will not have a major income source to help provide for you and your family. As you will be financially stressed there is a very low chance of you being able to cover any premiums for health insurance. In circumstances such as these your best option for temporary coverage would be COBRA health insurance.

The Consolidated Omnibus Budget Reconciliation Act was authorized by Ronald Reagan. The act was created to cover various subjects such as health coverage for the unemployed, regulated tobacco prices, and more. The particular part of the bill that should be read through to get a greater understanding on COBRA health insurance is Title X.

What is Title X?
Title X is a part of COBRA. This section was created for those that become unemployed for certain reasons such as being laid off, resigning, or taking medical leave. This section of the bill is also in effect for families of employees that pass away. Those that become separated or divorced to the employee that had health coverage can also receive COBRA health insurance as noted in Title X.

Who Can Apply for COBRA Health Insurance?
Not everyone will be eligible for COBRA health insurance. If you were fired from your job for gross misconduct or a similar reason then you will not qualify for COBRA health insurance. If you were laid off, resigned, on medical leave, etc, then you should be eligible for COBRA health insurance. If you become unemployed and need to continue your health insurance coverage then you should look into the qualifications for this type of insurance policy to see if you qualify.

How COBRA Health Insurance Works
COBRA health insurance is a type of insurance policy that is covered by your employer or ex-employer. It is basically a way to continue the health care coverage that was supplied by your ex-employer. The employer is forced to pay for the COBRA health insurance as it is the only way for him or her to qualify for tax deductions on health insurance. In order for the employer to receive the tax deductibles they will be required to offer coverage through the COBRA health insurance plan for as long as 18 months. The employer must provide health insurance for their ex-employee and possibly their dependents and spouse as well. In other situations such as where the employee passes away, the dependents and spouse can be covered for as long as three years.

Final Thoughts
It is extremely important that you and your family always have health insurance. There are a number of possibilities that could occur which could leave you in debt due to medical expenses. With any form of health insurance you can minimize the effect that these medical costs have on your finances. if you can take advantage of health insurance through your old employer while looking for work then you should do so. The COBRA health insurance is also useful for those that have an employee that is disabled or deceased independent in their family.

If you become unemployed for a respectable reason then you should seek temporary health insurance through COBRA. Most employers are more than willing to cover health insurance for their previous employees and their spouses and dependents through the COBRA policy. This is simply due to the fact that they need to do so in order to have tax benefits from the main health insurance policy for existing employees. To close, if your ex-employer offered health care benefits that you can no longer take advantage of due to being unemployed then you should take advantage of COBRA health insurance if you are eligible.

Last updated on Jul 3rd, 2010 and filed under Health Insurance. Both comments and pings are currently closed.

2 Responses for “COBRA health insurance”

  1. kids health says:

    It’s definitely important to keep healthy these days. With all the bad food people eat, it’s not surprising why the number of heart related deaths have been growing.

  2. James F says:

    I’ve been unemployed for close to 9 months and the amount of money I receive in State Funds for my unemployment is about 2 times the monthly amount for COBRA insurance. Only problem is I need to pay my mortgage, car, and utilities, not to mention food. I realize COBRA is a temporary solution but for many of us the last few years it’s become a long-term solution for health coverage. In a few months I’ll face a difficult decision of keeping COBRA of turning off my electricity. We’ll get by but some of the things in the country need to change.

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