COBRA stands for Consolidated Omnibus Budget Reconciliation Act of 1985. It was devised by the American government, which defines COBRA as an health insurance that would remain in effect should you be terminated or off-laid from your job. This health insurance would remain in effect for a period of 18 months after the job is terminated.
All companies that provide health insurance for their employees in a group plan have to abide by the rules defined by COBRA. There are also some cases in which the period of health insurance given by the company may be extended from 18 months to 29 months or even up to 36 months. COBRA is a very good benefit for you in case you have lost your job.
It acts as a stand-in for the insured during such tough times. But you need to aware of the fact that COBRA doesn’t apply to every terminated or sacked employee. You should take care and find out whether it applies in your method of termination before relying on it. It also provides insurance to your entire family if you had got them insured at the time of employment.
Eligibility for COBRA
Millions of people in America are insured by their employers because of group health insurance benefits that are provided at the time of employment. At the same time, there are many cases where the person loses health insurance benefits provided by the company. Ideally, when their services are terminated or when the company goes bust. In such a case the best option is to go for COBRA. It is an acronym for Consolidated Omnibus Budget Reconciliation Act, which provides insurance to employees that have been terminated.
The insurance is applicable for a period of 18 months after they have been laid off. In some cases, the period is extended to 29 or 36 months. But there is a clause in the law that says only employees of an organization with 20 or more workforce would be entitled for COBRA.
Just in case, there were less than 20 employees, then the state laws of Ohio provide extended period insurance for only 6 months. The basic question is who is eligible for COBRA? The points accentuated above lay down the ground rules as to who is eligible. It is important to remember that COBRA acts as a temporary insurance for the jobless. It is quite costly for a company to keep on paying expenses of former employees.
Health Insurance Coverage for People between Jobs
When you don’t have a job or are in between moving jobs, then there are many financial difficulties, which could creep up. You generally have to depend on someone for financial help to carry you out through this difficult time. If any medical problem or emergency occurs during this period it only adds to the difficulty.
Ideally your health insurance would cover any such medical expense and keep you at ease. But if you were unemployed then what would be the solution to such a situation? If you were not aware, affordable health coverage between jobs are available to help you with medical expenses.
The first is COBRA, which is valid for a period of 18 months after you have lost your job. In some cases this period may extend up to 29 or even 36 months. But there are some aspects, which have to be satisfied before you can be eligible for this benefit.
You have to be employed in a company, which had at least 20 members as a part of its workforce. If there were less than 20 members then the period of insurance goes down to 6 months in some states. This insurance is like a boon for many people who suddenly lose their jobs resulting.