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Insurance: What Are Your Options After COBRA Runs Out?

February 1st, 2010

By Bethany North

Bethany NorthCOBRA is a popular option for temporary health coverage at group rates. However, many individuals in the workforce today run into problems because it is only available under specific circumstances. Often times, this COBRA coverage can be more expensive than health coverage through your employer, especially if your employer is paying a portion of the premium. However, COBRA is generally less expensive than paying for your own individual health coverage.

What many workers are facing in the job force today is standing at a crossroads when their COBRA runs out. If that sounds like you, there are a few options available to you to find continual health coverage at an affordable price.

  • Start out by keeping your COBRA until you have other health coverage readily available to you. It’s not a good idea to have a lapse in your coverage because that could cause potential problems.
  • From there, look to your state for insurance programs that are income based. If you cannot afford individual health care, then this may be the best option available to you. Medicaid is a great choice if you have children and are below a certain income bracket. If you are also currently unemployed, then this could be your best choice for health care.
  • Consider individual insurance. There are many different options in individual insurance after COBRA runs out, but it is important to comparison shop to make sure that you are getting the very best deal possible. Examine all of the packages that are offered to you closely to determine what the deductibles, co-pays, and total cost may be. You don’t want to sign up for anything with hidden charges, causing you to pay more in the long run.
  • Work with a licensed insurance agent. This is someone who will know the market well, and they will also be able to answer all of your health care questions for you. Often times, they can work with you directly based on your income to make sure that your needs are met in the plan that you select.

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Insurance: COBRA Extension Moves One Step Closer

December 19th, 2009

by Jackie Simmonds, NEJS Blog Editor

Jackie Simmonds

On December 16 the U.S. House of Representatives passed the COBRA subsidy extension and expansion.  The bill now goes to the Senate where expectations are they will act quickly before the premium aid program expires at the end of the year.

Earlier this year Congress had stepped in to change the existing COBRA program to provide a government paid subsidy that matched 65% of an unemployed person’s premiums for nine months per individual.  That original program is set to end Dec. 31. The bill just passed in the House extends that nine-month period to 15 months. If you have already run past the nine-month period and have lost your insurance you would be able to get it back for the remainder of the 15-month period.

For those of us who are unemployed we have a great appreciation of the American Recovery and Reinvestment Act, since enacted in February it is estimated that it has helped to keep 7 million people covered by health insurance.

The package that is now before the Senate includes:

  • Change the end date of eligibility for the COBRA subsidy from December 31, 2009, to February 28, 2010.
  • Expand COBRA premium subsidy period to 15 months (from the current nine months).
  • Allow a period for the retroactive payment of premiums for individuals whose subsidy period expired on November 30 and who did not pay their premium for December coverage. The retroactive period is 60 days, beginning with the enactment of the provision or, if later, 30 days after provision of the notice.  The same refund/credit rules under the original bill apply to any eligible individual whose subsidy expired in November and who has since paid the full COBRA premium.
  • Require a special notice to all assistance-eligible individuals who are on COBRA on or after November 1 or whose qualifying event is a termination of employment occurring on or after November 1 that describes the new 15-month premium subsidy.
  • Eligibility for the COBRA subsidy is still only on the involuntary termination of employment occurring on or before the new February 28, 2010, sunset date, without regard to when the COBRA coverage period begins. For employers providing subsidized coverage that defers the COBRA start date, the 15-month period may not begin until well into the future.

Highlights of the current status of the COBRA extension were pulled from several articles which provide more details and redirects to other COBRA related information, to learn more about the extension and how it impacts you read:

House Passes COBRA Subsidy Extension and Expansion, by By John Hickman and Ashley Gillihan in the The Employment Law Post, Human Resources News

US House Passes COBRA Subsidies Extension Awaits Senate Vote, by Jesse A. Hamilton, Insurancenewsnet.com

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Finances & Insurance: COBRA Subsidy Extension?

November 30th, 2009

By Jackie Simmonds, NEJS Blog Editor

Many of the unemployed count on the COBRA subsidy that was created as part of the American Recovery and Reinvestment Act of 2009 (ARRA) and signed into law in February 2009 to be able to continue to provide health care coverage for their family.  However this subsidy has begun to run out for many job seekers.  This means if existing coverage is continued health insurance bills could go up as much as three times what job seekers have currently been paying.

There are bills that have been introduced to address an extension for the COBRA subsidy in the House of Representatives and the Senate, including House Bill HR 3930(2) and 3966(3) and Senate Bill S. 2730(4) but as of this blog posting neither have been enacted.

Senate Bill S. 2730(4): Extends the maximum COBRA continuation coverage period for individuals who were involuntarily terminated between April 1, 2009, and December 31, 2009 for 6 months. It also adds a new 75% COBRA subsidy for the newly unemployed that became unemployed between 1/01/2010 through 06/2010. The COBRA subsidy is extended from 9 months to 15 months and a reduction in hours from full-time to part-time becomes a COBRA-qualifying event.  About.com Human Resources, What’s Up With the COBRA Subsidy?

House Bill HR 3930(2): COBRA is extended from 18 months to 24 months. Current subsidies receive a 6 month extension and a 65% COBRA subsidy is extended through 1/06/2010. About.com Human Resources, What’s Up With the COBRA Subsidy?

How do you know when COBRA will run out for you and your family?  CNN recently posted an article on a widget that eHealthInsurance created to help job seekers understand exactly where they stand.  The widget is available in the following locations:

Other Helpful Information:

GovTrack.us:

A tool created by Civic Impulse, LLC to help the public research and track the activities in the U.S. Congress allows you to follow COBRA bill activity. CNN COBRA Subsidy Extension?: eHealthInsurance Launches COBRA Subsidy Widget to Calculate Expiration Dates

» Read more: Finances & Insurance: COBRA Subsidy Extension?

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