The History of COBRA Health Insurance
COBRA health insurance began in 1986 when a landmark health insurance bill passed through Congress. The Consolidated Omnibus Budget Reconciliation Act or COBRA allowed terminated workers or workers with reduced hours to maintain benefits they had under their employer.
COBRA benefits come at a costly rate for many though. Since the employer no longer pays a part of the health insurance, many find the COBRA health insurance premiums to be costly and out of budget. However, many individuals and families need to consider this health coverage, especially if the insured has had difficulty in the past obtaining coverage, they may be expecting a pregnancy in the coming months, or pre-existing conditions exist. The cost of the COBRA coverage should be weighed against the cost of not having health coverage.
The Consolidated Omnibus Budget Reconciliation Act carries over all health coverage previously enjoyed through your employer's benefits package. A terminated or laid off employee has 60 days to apply for COBRA and retain their existing coverage. Coverage cannot be had by individuals seeking insurance without having a previous benefits package. The benefits premium must be paid for the coverage to continue. When the coverage begins, the insured can cancel the policy at any time, but cannot restart the benefits if a job falls through or something else occurs. Before canceling COBRA coverage, make sure the new benefits will be starting.
The history of COBRA health insurance teaches us that those laid off and terminated had it far worse before 1986. The bill proposed and gave those individuals and families a little bit of safety from the harshness of job loss and the insecurity that follows. Of course, the costly premiums can still be an issue if a family has lost its main source of income. The hope was to use COBRA as a stepping stone to a new employer's benefit package.
Should you accept the COBRA health insurance? The question really depends upon you and your family's situation. If you have costly medical expenses, then it would be prudent. If you have a healthy family, then it would likely be wise to go with an open market health insurance plan instead of the COBRA plan. Why? The COBRA plans likely have a two to three times variable in relation to an identical plan on the open market. A person could even obtain quotes from health insurance providers to find out just how much of a cost differential would exist. The family would want to take the COBRA insurance if there's any question of whether they would be denied or not by other insurers.
The history of COBRA health insurance has brought about quite a few changes in the health insurance industry. The COBRA health benefits are costly to maintain, but they do offer a bit of security. If possible, find a run a few other health insurance quotes from accredited institutions to find out the cost difference. It may save you time and money on your family's health insurance.
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