How Much Is COBRA Insurance? All You Need To Know.

Unclear on what Cobra Insurance is? Read on ahead to get a detailed guide on the subject. 

A majority of us know how to handle it and manage our finances and our expenses when we are unemployed. During unemployment, it can be extremely difficult to manage money and allocate it to each task. After all this, you might be left behind with nothing. When allocating our money, it tends to spread out in various areas. You will have to set an amount aside for food, clothing, rents, etc. all this might result in nothing left for you to pay your insurance plans for. This is where Cobra insurance comes in. 

Down below we have curated a detailed guide to help you learn more about cobra insurance and answer various questions of yours like how much is cobra insurance, how to get cobra insurance, and the cobra insurance rules. 

What Is Cobra Insurance?

Starting with the most basic queries, Cobra is an abbreviation for Consolidated Omnibus Budget Reconciliation Act. This is a federal law which is meant to make it easier for recently unemployed people to pay off their insurance fee. It is important that COBRA does not work for all insurances and is meant only for health insurance. When an individual quits or loses their job, they have the opportunity to continue paying their health insurance coverage temporarily.  

Passed around 20 years ago, this insurance was brought into place and accepted by Congress to make sure that families have a safety net when it comes to paying off insurance coverage dues. Many unemployed people tend to face even more difficulties as a result of being denied health insurance.  Cobra insurances enable individuals to be able to stick to the plan which was offered to them by their former employees. This insurance can last up to a period of 18 months.  It is crucial to note that one can only be eligible for COBRA if they are covered by the plan sponsored by their employer at the time of quitting or losing the job. 

How Does Cobra Insurance Work If I Quit My Job?

To be able to get an advantage from this insurance, you must first be aware of how Cobra insurance works if you have voluntarily lost your job or in other words, if you choose to quit. This is how it works. 

First of all, you will need insurance on COBRA coverage. This information will be either given to you by your employer, by whoever your insurance carrier is, or by both the people. It is helpful for you if you choose to refer to everyone and get as much information as you can. This way you will be avoiding yourself from making any uninformed decisions. 

Next, you will be given a particular amount of time to think about how you want to proceed ahead with the coverage. This time limit is usually for 60 days in most places. If you choose to go ahead with the plan then you will have some other steps to go through. If you decide not to continue with your plan then your health coverage will come to an end on the exact day on which your employer’s plan for coverage will end. 

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After the 60 day period in which you choose to stick with the plan under COBRA insurance, this plan will start right after the day when your employer’s plan for coverage will come to an end. There will be no changes in your treatment schedule or the benefits or offerings which are provided to you. Under the COBRA insurance, you can visit and see the same doctors and physicians that you were dealing with earlier and will get all the same features. 

As said earlier, COBRA insurance plans usually last as long as 18 months but this figure can go higher up to 36 months as well. You should talk to professionals and get their opinion on the duration of the plan. It depends on several factors such as the type of event that qualified you for COBRA in the first place. 

Lastly, keep in mind that the plan can come to an end for you and you can be subject to termination if you fail to pay your fees and premiums on time for the payment of the coverage. The COBRA insurance will also be taken away from you once you land a job that offers you health insurance coverage. 

How To Get COBRA Insurance?

COBRA insurance is offered by companies that have 20 or more employees. It is viable for the local, state, or private sector. In such cases, while counting the employees, part-time employees are counted as half of a person while full-time employees are counted as one person. Some companies might not offer COBRA insurance but they offer other similar laws to aid their employees. Here we will discuss how to get COBRA insurance. 

Once you learn what makes you eligible for COBRA and you lose a job or quit your job, you will have to wait a while for a letter. This letter will be provided to you in the mail. Your employer will be responsible to alert the insurer who is in charge of the health plan within 30 days. Then, the administrator of the plan will get back to you in 14 days duration and send you a notice through the mail. This notice will help bring you up to date about all the information about your coverage, the costing of the plan, and the paperwork for your plan.  

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Once you have your notice, you will then have around 60 days to attain your health coverage plan. Keep in mind that if your husband or wife was previously under the plan then they will be covered under COBRA as well.

Lastly, you will have a time duration of 45 days to make your first payment of premium starting from the date the election form was given in. Missing payments can lead to you losing the plan altogether. Keep in mind that if the amount is paid timely in full you will have the ability to retroactively cover it. 

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How Much Is COBRA Insurance?

COBRA insurance can be a little more expensive than usual insurances but that is because they will be paying for all your medical needs. You will have to pay a complete 100% of the costs of health insurance and around 2% of administrative fees as well. How much COBRA insurances costs is not the same for everyone. It can differ from one carrier to another and on your former employer as well. Usually, on average, COBRA insurance plans costs around $22,000 for family coverages. 

Some other factors that add to the expensive nature of the plan are the fact that employers usually take up more than half of the amount paid for the premium. When there is no employer, the former employee will have to pay the complete costs of the plans including the premium amount. 

Don’t worry, though. If COBRA is too pricey for you then there are other alternatives present as well. 

COBRA Insurance Rules

Cobra insurance will only be available to you under a certain set of rules. Neglection of these rules or failing to keep up with them can result in many severe situations such as the coverage being taken away from you as you will be terminated. 

You must stick to the rules and follow them while you are on the plan to ensure that there are no hindrances in your way. Keep in mind that the plan will last for 36b months maximum and that will depend on your insurance carrier or employer as well.

Get in touch with the authorities involved in the process and get to know more about the intricate details. One question we keep hearing is “how much is cobra insurance for a family of 2?” If you want to find out how much is COBRA insurance for a family of two, we suggest you get in touch with your insurance carrier and ask them. 

  • First of all, it is necessary to keep in mind that COBRA insurance will only be available to you if you quit your job, if you are fired or if your hours are cut down. This insurance will not be available for you if you are fired for gross misconduct so be aware of that. 
  • You should be employed under the employer’s health insurance plan. Furthermore, 
  • COBRA insurance will end when you come to the end of your coverage period for the plan. 
  • This plan will also be terminated if you stop making payments. 
  • One other rule to keep in mind is that COBRA insurance will be terminated for you if you become eligible for Medicare.
  •  If your employers stop offering health coverage, you will not be eligible for COBRA insurance. 
  • Also, if your employer goes out of business then COBRA will be taken away from you as well. 
  • COBRA insurance will only cover your health insurance and not any other insurance plans such as life insurance, disability, travel, or insurance for hospital care. 
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  • Your COBRA insurance plan will be terminated when you land a new job. This is also only true and applicable for you if your new employer is offering you health insurance. 

Conclusion

COBRA insurance is a great plan opportunity provided for all those people who have been recently unemployed and need some time to get back on their feet. Meanwhile, we know that you don’t want your health insurance to go to waste. This is where COBRA insurance comes to your aid. 

Get yourself COBRA insurance so you can be helped. One more thing to keep in mind is that COBRA insurance will be extended to whoever was under the previous plan. If your previous employer extended health insurance to your children or your spouse, then they will be eligible to obtain COBRA insurance as well. 

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.

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