Laid Off? How to Get COBRA


COBRA health insurance coverage is a higher-cost version of your same employer-covered plan. It is an option for people who lose their jobs but still desire health insurance coverage. If you are laid off, in most cases, you and your dependants are eligible for COBRA coverage for up to 18 months after termination. If you are disabled, you can qualify for coverage for up to 29 months or, if you’re a widow, 36 months.

Getting COBRA
In most cases, you will receive a letter from your employer regarding your termination. This is deemed the “qualifying event” for COBRA coverage, or the initial announcement of your termination. You will need to submit a copy of this letter to your health insurance provider within 60 days. If you do not do this, you lose your eligibility for COBRA coverage.

After you’ve submitted this letter to your health insurance provider, you will receive a letter in return that will outline your new monthly insurance premium. Instead of being subsidized by your employer, though, you are typically responsible for 102% of the cost of the policy (since you have to handle the administrative costs as well). According to USA Today, on average, this is equal to around $400 a month on average for individuals and more than $1,000 a month for families. You will need to pay your premium by a specified date in order to continue your coverage with no interruption.

Federal COBRA Subsidy of 2008-2009
Recently, the federal government has stepped in to offer some relief for COBRA policyholders. For employees laid off between September 1, 2008 and December 31, 2009, the program offers a 65% subsidy for the cost of COBRA coverage for taxpayers who have modified adjust gross incomes below $125,000 a year. Under this bill, you are only responsible for paying 35% of your coverage as opposed to the traditional 102%. The government reimburses employers in payroll taxes in order to pay for the subsidies. Further, employers are required to offer it if they employ more than 20 people and have a group plan. Anyone is eligible as long as you had health insurance at the time you were laid off.

Alternative Coverage
Sometimes, the cost of COBRA can be much higher than simply purchasing a new policy for you and your family. If you don’t have any pre-existing conditions, before signing up for a COBRA plan, you might consider shopping around during the first few weeks after you’ve been terminated to see what types of quotes you can get from a healthcare provider.

Related Stories:

5 Health Insurance Tips for the Unemployed

How to Get Your COBRA Premiums Reduced After You’ve Been Laid Off

COBRA Plans That Are Good For Your Health

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