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Health Insurance Coverage After a Layoff

If you have lost your job through a layoff, then you are entitled to continuation of health coverage benefits through the Federal COBRA (Consolidated Omnibus Budget Reconciliation Act) health benefit provisions law, which was passed by Congress in 1986. COBRA provides temporary (up to 18 months) continuation of health coverage at group rates. To be eligible for COBRA health insureance coverage, you must have been enrolled in your employer's health plan when you worked there, and the health plan must currently be active for existing active employees. Additionally, COBRA covers health plans maintained by employers of 20 or more employees only.

Electing COBRA

After a layoff, a former employee must be given an election period during which he may choose whether or not to elect COBRA coverage. Qualified employees must be given at least 60 days for this election. If elected, former employees typically will have to pay the entire brunt of the monthly group health benefit premium. That is, if your company formerly subsidized part of your monthly health benefit premium, this usually will not be the case when you elect COBRA coverage. In this scenario, the entire brunt of the monthly group health premium will be passed onto you. By law, the premium that you pay under COBRA cannot exceed 102 percent of the monthly cost to the plan (the extra 2 percent covers possible administrative costs incurred by the employer). Although the rates that you will be forced to pay may seem exhorbitant, keep in mind that these rates are "group" rates, and may be lower than corresponding "individual" rates.

COBRA contact information

If you need further information regarding COBRA, you can contact the appropraite parties via:

Private Sector Inquiries

U.S. Department of Labor
Employee Benefits Security Administration
Division of Technical Assistance and Inquiries
200 Constitution Avenue NW, Suite N-5619
Washington, DC 20210
Tel: 1-866-444-3272
Web: http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML

Public Sector Inquiries

Centers for Medicare and Medicaid Services
7500 Security Boulevard
Mail Stop C1-22-06
Baltimore, MD 21244-1850
Tel: 1-877-267-2323 x61565
Web: http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML

Alternatives to COBRA - Health Insurance Vendors

If you get layed off, it is imperative that you continue your health care coverage, whether it be through COBRA, or acquiring insurance on your own. Without insurance, you could be subjecting yourself to tremendous medical and hospitalization costs should the need arise. Failure to have proper insurance, could subject you to outrageous medical costs and even subject your personal assets to risk, should you warrant expensive medical care costs. Hence, it is essential that you continue your medical coverage - even though the cost may be greater than what you are used to, it is better to be safe rather than sorry.

Since paying the full-brunt of your employer's monthly health plan premium can be exorbitant, it is recommended highly that you look to procuring your own health insurance during the COBRA election period. Many good deals, with excellent coverage, can be obtained through well-known internet-based health benefit discount brokerages. We highly recommend that you click on each of the companies listed below, and fill out a free application, to determine the health coverages that you can obtain. There is no cost involved, and in most cases, you will be able to save many hundreds of dollars per month, with some of the available plans. At a time of unemployment, saving this much is critical to your budget.


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