What Is COBRA Health Insurance?

David Russell, Empower Brokerage’s Regional Sales Director answers the question, “What is COBRA health insurance?”

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. What COBRA health insurance does is it gives workers and their families who lose health benefits the right to choose to continue their group coverage benefits for a limited period of time under certain circumstances. Some examples include voluntary and involuntary loss of job, reduction in hours worked, or just transitioning between jobs. You may consider transitioning to COBRA insurance after a death, divorce, or other life event. In these cases, COBRA allows you to extend the life of your group coverage that you received from your employer.

Who pays for it?

Now generally, your employer is going to pay a portion of premiums on your behalf. When you elect COBRA, you will be responsible for all of your premiums, so you can expect an increase in these premiums. Keep in mind, your employer was paying a portion of that, which is why it seemed lower. COBRA is offered in places that have twenty or more employees. COBRA might not be available for everyone. For example, in Texas, you would have a state continuation. This is for employers who have between 1 and 19 employees. So, make sure to ask the following question when first hired: “Is COBRA offered here as part of the benefit package?” That way you will have coverage if and when group coverage isn’t available.

Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions.  So if you have any questions or concerns, comment below and your question may be the topic of our next post!

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