Saturday, January 16, 2010

Keys to Using COBRA Insurance

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees who lose their health insurance coverage the right to receive temporary employer-provided health insurance coverage for a specific period of time for issues such as resignation, termination, a reduction in work hours, death, divorce or transition between jobs.

You have 60 days after your leave your employer to decide if you want to sign up for their COBRA plan. Verify with your employer if you will still have health insurance coverage under your existing plan once you leave the company and how long coverage will last.

Participants on a COBRA plan may be required to pay the entire premium up to 102% of the cost of the plan. A typical family plan may cost $300 a month and the employee may pay $150 a month and the employer pays the other $150. Under COBRA the participant could pay the full $300 up to $606 a month for coverage.

If you are healthy you can get a cheaper plan on your own instead of using a COBRA plan. Health insurance coverage varies state by state and finding your own health insurance may take some research to find a plan that's right for you but is worth it for the savings you that you will get.

If you plan on leaving your employer or know that a change in your employment status will happen, start at least 30 days prior and begin shopping for health insurance. If you are starting a new job find out when coverage from your new employer will begin. If you are taking a break from work or will no longer be working use health insurance comparison sites like einsurance.com or find out about state coverage information at statehealthfacts.org.

When shopping around for health insurance ask the health insurance provider for a copy of the Explanation of Benefits (EOB) document which provides more detailed information than the standard benefits summary or brochure provided to you. They may refuse or state they that are unable to give it to you until you sign up but be persistent and keep asking for it until they give it to you.

Don't sign up for health insurance plans advertised on television, many times these plans don't provide the coverage needed and use large named companies to lure unsuspecting consumers into their programs. You can also research government health insurance plans. For more information on COBRA plan visit dol.gov/ebsa/cobra.html.

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