WHAT ARE MY OPTIONS AFTER MY COBRA HEALTH PLAN ENDS?
If you have lost your group health insurance because of job loss or reduction of work hours, death, or divorce, then you have probably heard of COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985. COBRA gives individuals the right to continue their group health insurance coverage after they have lost it due to certain qualifying events.
COBRA allows beneficiaries to pay for continuation coverage for anywhere from 18 to a maximum of 36 months. For employees, the standard period is 18 months; for spouses and dependents the standard time is 36 months. Opportunities for expanding beyond the 18 month period are available. For example, if you experience a second qualifying event, you may be eligible for an additional 18 months of COBRA coverage. If you go on disability within the first 60 days of COBRA coverage, you may be eligible for an additional 11 months of continuation coverage. No matter the circumstances, however, the maximum period that anyone can keep COBRA continuation coverage is 36 months.
Choices After COBRA
When you reach the end of your COBRA coverage, you have some options. If your group health plan offers beneficiaries the option of converting their group health plan into an individual policy, then it must also offer you the same option. Conversion to an individual plan may be more expensive than the group health plan (even with COBRA’s high premium) and may not offer the same coverage benefits. If your COBRA coverage terminates prior to the conclusion of the maximum period–for example, you begin to receive healthcare through another job, or through your spouse’s job–then your plan is not required to offer you conversion. Check with your plan administrator for details.
Thanks to the Patient Protection and Affordable Care Act (ACA), individuals have the option of purchasing a health insurance plan through either the federal or their state marketplace. Plans are available in three tiers for every budget. Some individuals, depending on their annual household income, may be eligible to receive subsidies for purchasing healthcare. You may also purchase healthcare privately, outside of the healthcare exchanges.
Limited Time To Act
Whatever you decide to do, you have only two months to make your choice. After two months without health insurance, you will become liable for paying the healthcare penalty known as the Shared Responsibility Payment. To make sure you aren’t penalized, select a new health plan before your COBRA continuation coverage ends. RedQuote works to compare the benefits and costs of your previous COBRA coverage with any available marketplace health plans you may be considering. We can help you find a comparable plan that will fit your budget. If you’d like RedQuote to help you find the right plan, don’t hesitate to contact us.
Published July 13, 2018.