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How Do I Set Up a Medical Cobra Account?

COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act. In essence, this act allows terminated employees to continue to receive the same medical insurance plan in the event of their termination. The former employee pays the former employer for the right to continue to receive this insurance which prevents gaps in coverage that can negatively impact enrollment in insurance once employed again.

  1. About COBRA

    • COBRA is not an insurance policy or any sort of medical coverage. It is an act passed by congress and signed into law that allows you to maintain your present employer-provided insurance group plan in the event of your termination.

      Often, if not always, this is at a more expensive cost than was previously enjoyed because the employer is not obligated to pay the share of the costs they used to cover. However, the ability to maintain this plan is important should you have chronic conditions or simply wish to avoid having extended waiting periods on your next insurance plan because you had a break in coverage.

    How to Sign Up

    • In the event of your termination, you should receive a letter either mailed to your current mailing address or hand delivered to you within 44 days of your termination. You then have 60 days to accept the continuing coverage. After you have accepted continuing coverage, you have 45 days to make your first payment.

      If your former employer does not give you your notification in a timely manner, you can choose to sue them. However, the pay out most certainly won't make you wealthy. If you are facing serious medical expenses, it still may be a good idea to go to court in an effort to ensure continued coverage.

    Recent Changes

    • As a part of the American Reinvestment and Recovery Act, the government subsidizes up to sixty five percent of the costs of continuing coverage for up to fifteen months. As the typical continuing coverage plan only lasts for 18 months, this subsidy covers a very large portion of the overall cost of continuing your health insurance, which can be as much as 85% of your unemployment check.

      As well, many states have addendum's and variations of their COBRA laws, many of whom mandate shorter coverages for employers with less than 20 employees. These employers would otherwise not be required to provide continuing coverage.

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