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What is COBRA?

Well in this case it’s not a venomous snake. COBRA stands for Consolidated Omnibus Budget Reconciliation Act and is a Federal Law that requires most employers to allow most of their employees to be covered by the medical insurance that was offered by their employer should they lose their job. COBRA does not allow you to continue your insurance at the same premium that you may have been used to paying while working with your employer. Your employer is not required to continue paying their part of your plan’s premium. In fact, you may see the premiums that you pay for the insurance increase by up to 102%.

What are the Benefits of COBRA

Depending on your circumstances or those of your family, COBRA could have immense benefits. If there is illness in your family that developed while you were working with your employer, you may have difficulty getting them on a new plan that you find after your employment ends. COBRA will allow you to continue the same coverage you had throughout your employment without having to reapply for coverage or submit to medical exams and applications.

Another advantage to COBRA is that it can save you from having to search for the insurance coverage you are used to, or looking for a new doctor with new coverage during the transition period between jobs. Many people find it very efficient to simply stay with the same insurance coverage they had with their former employer as they transition until a new one until the coverage with their new employer begins.

So Do I Need COBRA?

The vast majority of people who lose their employment and the medical insurance attached to it opt not to use their COBRA to continue that coverage, primarily because they are unprepared in the sharp increase in premiums that they are required to pay. Depending on the generosity of your employer, you could find the premium that you were used to paying out of your check more than doubling. The primary candidate for COBRA coverage is the person who has medical issues or issues in their family that need continued coverage or may make getting new coverage difficult. Such pre-existing conditions can make the drastic increase in premiums seem much more worthwhile.

COBRA - What Is It and How Does It Work?



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