What is Cobra Health Insurance? An employer of a private or local government sector offers group health insurance to its employees when the number of employees is more than 20. Both full-time and part-time employees will be counted in this regard. COBRA stands for Consolidated Omnibus Budget Reconciliation Act. You might be wondering what is Cobra Health Insurance; it’s time to get the answer.
When an employee is terminated with a reason other than misconduct or his working hours are reduced by the employer, he is entitled to a temporary continuation of group health insurance coverage. This health coverage is known as Cobra health insurance.
What are Qualifying Events?
There are certain events where the employer doesn’t drop group insurance for his employee temporarily. It’s time to get details of these qualified event details for the employee to qualify for temporary health insurance coverage. When an employee gets terminated for a reason (other than misconduct) or an employee receives a reduction in his working hours, he qualifies for this coverage.
Here are some events when a child and spouse of an employee get qualified for continued COBRA coverage. When an employee dies then his spouse and dependent child becomes a qualifying beneficiary. Besides, they qualify for a group health plan from the employer when he terminates an employee for a reason other than gross misconduct or reduces his working hours. This coverage is available to spouses and dependent children of an employee who is entitled to medicare. Another qualifying event is divorce and legal separation of employees from spouses.
Who are qualifying beneficiaries?
A qualifying beneficiary is a person who was covered by a group health plan before the day a qualifying event happened and made him lose his or her group health plan. If an employer is involved in the bankruptcy case, then a retired employee, the retired employee’s spouse, and dependent child would also become a qualifying beneficiary.
Alternative Options
In case an employee wants to avail of this continuing medical care coverage facility, he needs to pay the full cost of this health plan, including two percent administrative cost. Before an employee selects this option, he can look around the marketplace. He may find some better or cheaper health insurance options in the market. He can enroll for his spouse’s health plan within 30 days of losing his group health plan. Another option is to enroll in the parent’s health coverage plan.
When a person loses his job-based medical coverage, he is entitled to a particular tax credit option to buy a health plane from private insurance companies and enjoy low cost-reduction options and premium facilities.
Know you know what Cobra health insurance is and whether you are qualified for it or not. Explore your best options before deciding to go with this continuation of the employer’s group health plan.