Help Understanding COBRA Health Insurance

Understanding COBRA health insurance is critical in this day and age. Loss of employment or reduction of hours can leave you in a tough financial situation while also burdening you further with a loss of health benefits. Extending your group health plan may be an option, so take a few minutes to read through this article to get an understanding of how it works.

What is COBRA Health Insurance

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act which was enacted in 1986. Its purpose is to allow employees to continue group health insurance in the instance that it is terminated or no longer available. If you are laid off from work or recently retired, you may qualify for COBRA insurance.

Who Qualifies for COBRA Health Insurance

There are three qualifications for continued group health coverage under COBRA. Specific requirements must be met for plans, qualified beneficiaries and qualifying events in order to be eligible for continuation of benefits. The employer you work for must have 20 or more employees on at least 50 percent of typical business work days in the preceding calendar year. A qualifying beneficiary is an employee, spouse of an employee or a dependent child of an employee who was covered under the group plan before the qualified event. A qualifying event is the loss of employment, either voluntary or involuntary, that is not the result of gross misconduct. A qualifying event may also be a reduction in the number of hours of employment.

Time Restrictions Concerning COBRA Health Insurance

Once a qualifying event has been reported to a health plan administrator, you have 60 days to decide whether or not choose COBRA continuation of health care coverage. Employers have 30 days to notify health plan administrators of a qualifying termination. Once COBRA benefits begin, you can stay with the program for a maximum of 18 months, though if you become disabled within the first 60 days of COBRA coverage, you may qualify for an additional 11 months of coverage as well as your qualifying dependents.