Many of us look for work at companies that offer benefits. This is how most of us are able to afford health insurance for our families. One of the most frightening things that happens when a person loses his or her job is that suddenly, your health insurance is gone as well, at a time when you can least afford to pay for medical care out of pocket. Just one illness can eat through your emergency funds in the blink of an eye, and send you spiraling into debt.
Fortunately, there is hope. COBRA is the acronym for Consolidated Omnibus Budget Reconciliation Act. It is designed to temporarily extend the health insurance coverage that you were previously getting from your employer. COBRA can cover you, your spouse, your and dependent children. In some cases, it will also cover your former spouse. It gives you access to inpatient and outpatient hospital care, care from a physician, coverage for surgery and other major medical benefits, and coverage for prescription drugs, dental care, and vision care. The advantage of using COBRA is that you will continue to have health insurance, at least for a little while. The disadvantage of using COBRA is that the cost might be higher than you can actually afford to pay for.
To qualify for COBRA, three requirements have to be met. First of all, the group health insurance plan that you were getting from your employer has to have been covered by COBRA. This depends mostly on how many employees your former workplace had. Not all employers can offer health plans that will enable you to extend them with COBRA.
Secondly, a qualifying event must have happened. Qualifying events refer to the actual thing that caused you to lose your job. If you were fired for gross misconduct, you cannot qualify for COBRA. However, all other reasons are acceptable, including a reduction in the number of hours of employment that you were previously getting. If you qualify to be covered by COBRA, so does your spouse, and so do your dependent children. COBRA can also be used in the case where a divorce or legal separation from the spouse that has employer based health insurance causes you to lose your health insurance. COBRA also covers people in cases where the covered employee dies.
The third qualifying event is that you must be a qualified beneficiary for the qualifying event that has occurred. What does this mean? It means you have to either be the employee who lost the job that the health insurance was coming from, or the spouse or dependent child of that person. If you are in the process of adopting a child when the qualifying event happened, that child may be eligible for coverage under COBRA.