COBRA (Consolidated Omnibus Budget Reconciliation Act) defines a health insurance program that enables employees and their dependents to keep health insurance benefits after the employee loses their job or has reduced work hours. Since many people ask ‘What is COBRA health insurance?’ the main elements are outlined below.
Employers that have 20 or more full-time or equivalent employees are normally required to provide COBRA coverage. This insurance is limited to a period between 18 and 36 months dependent on various conditions and applicable termination scenarios. The cost of COBRA coverage, however, is high for the unemployed individual because they need to pay the entire cost of the insurance while previously employers would pay a significant part of their health premiums.
For employers that have more than 50 or more full-time or equivalent employees, employers must provide health insurance to qualifying employees through insurance premiums. If. for whatever reason, an employee becomes ineligible for this cover (such as falling below the number of hours that most be worked per week) the employer may discontinue health care premiums. In these cases COBRA allows the employee to retain their health coverage but they must pay for it on their own.
Under the COBRA program the former employee, their spouse, dependents children must be offered the option of continuing to receive group coverage which would otherwise be terminated. Although employees in these circumstances might pay more for their health insurance (because the employer is no longer making contributions) it would still be less than premiums for individual health insurance which they might otherwise have to use to cover their family. COBRA also differs from some employer provided coverage in that it only covers costs of prescription drugs, vision care and dental treatment and does not include a life insurance or disability insurance component.
There are various sets of criteria that define an employees eligibility for
What is COBRA health insurance. Even if an employee is eligible they can only receive approval after specific qualifying events occur. Qualifying events in these cases usually include separating form an employer (voluntarily or involuntarily). COBRA is intended to provide bridging health coverage for an employee until they find another employer. Other qualifying circumstances apply to seasonal workers who can sign up for new coverage when they move to a different area. Serious illness and disaster can also be qualifying factors. An employee has 60 days from the occurrence of the qualifying event to enrol in COBRA coverage.