|
| Enables qualified, recently separated employees to continue
their group coverage by assuming responsability for the total premium (plus a 2%
administrative fee) for their coverage. COBRA generally is available for
qualified individuals leaving a company with 20 or more employees. Some states
have created COBRA-like programs for groups of less than 20 full time employees.
|
| COBRA
Coverage |
- Allows for an extension of group benefits for a period of up
to 18 months in most cases. In some instances COBRA can be extended for up to 36
months.
- You get the same coverage as your former employer offers
existing employees (assuming your former employer is still in business).
- You pay the full cost of the coverage, plus a 2%
administrative fee.
- Full premium means any amount you contributed, PLUS what
your employer contributed, PLUS the 2% fee.
- Exhausting COBRA
coverage is required for HIPAA eligibility.
|
| Cost: Employer Sponsored
vs. COBRA |
| While
Employed |
Enrolled
in COBRA |
- Family of four, age 30-39
- PPO, $250 deductible
- Monthly premium
- Employer pays 90%
- You pay 10%
|
- Family of four, age 30-39
- PPO, $250 deductible
- Monthly premium
- You pay 102%
|
|
COBRA Advantages and
Disadvantages |
| Advantages: |
- Typically richer "large group" type benefits
- Guaranteed coverage for at least 18 months
- Counts as creditable coverage for HIPAA purposes
|
| Disadvantages: |
- Generally expensive (102% of the total premium)
- Limited duration. If you develop a medical condition during
the 18 month period, your choices are limited once your COBRA coverage expires.
|
| Note: If you choose
not to elect continuation of group coverage
under COBRA you will loose valuable rights
under HIPAA |
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