COBRA Insurance Coverage: 5 Things You Should Know

COBRA insurance coverage is a common phrase, but most people aren't fully aware of what COBRA is, what it costs, and whether or not it's really beneficial to an unemployed worker. Lucky for you, we've been there done that, and are back to report on it.

1. How long can you take advantage of COBRA insurance coverage benefits?

COBRA insurance benefits last up to 18 months, although there is the ability to apply for extended coverage, which can last up to 36 months. However, not paying benefit premiums on time can result in your COBRA benefits being terminated.

2. Will COBRA insurance cover my dependents (i.e. spouse and children)?

Yes, COBRA insurance covers your spouse, children, or any other qualifying dependents. In some cases, it will even continue covering a separated or divorced spouse if they were previously on the COBRA plan. The details for qualifying dependents are a bit varied, and more specific information can be found on the Department of Labor's website.

3. Once my COBRA insurance benefits run out, can I extend them?

Yes, you can. Like unemployment benefit extensions, COBRA benefit extensions are also available by applying for an extension once your benefits are about to run out. Similar to unemployment insurance requirements, you must submit additional information to apply and qualify. Qualifying reasons for an extension include another job termination, lack of ability to find work, or disability within the timeframe of having COBRA benefits.

However, be aware that benefits can shoot up in price, costing the individual up to 150% of the premium cost for the extended period.

4. If my company went out of business, can I still qualify for COBRA insurance benefits?

Unfortunately, no. Since COBRA benefits piggyback on your company's private insurance group plans by allowing you to continue on your same health plan at a higher premium, a company that's gone under no longer has that insurance plan, therefore you're no longer able to jump back on those benefits.

5. How much does COBRA insurance cost and is it worth the cost?

COBRA insurance benefits are anything but cheap, although they tend to be cheaper than individual insurance plans. Instead of having your employer contribute 50%, 75%, or even 100%, you'll be responsible for the entire premium payment, which could be upwards of $1,000 for most individuals within a group plan. On top of that, you may be required to pay a 2% administrative fee. Since COBRA benefits aren't always feasible on a diminished household income or while receiving unemployment benefits, many Americans opt for Medicaid coverage during this time, or look for discounted plans through their state - like the Healthy New York insurance plan in New York State.

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