COBRA, Insurance Rights

Everything you need to know about insurance


Insurance Q.& A. :    COBRA, Insurance Rights

How does COBRA affect my group insurance coverage when I leave a job?

If you leave your job, you can keep the insurance offered by the company's group plan for up to 18 months. Your right to obtain this extended coverage is guaranteed by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985, whose acronym is COBRA. Details vary from state to state, but COBRA generally allows you to purchase insurance through your employer's group plan for the same price the employer pays (plus 2% extra to cover administrative costs). If you're disabled, your COBRA rights last for 29 months. Buying COBRA insurance isn't always a great idea. If the company you work for offers a medical plan, it's probably paying at least part of your premiums for you. If you left the company, your employer would no longer be required to subsidize your payments. So, under COBRA, you'd pay the full tab yourself, which can be hefty. You might want to exercise your COBRA rights and stay with the plan if you can't get coverage elsewhere, or if the coverage is the cheapest and best that you can obtain. You will need to shop the market to determine the best alternative.


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