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COBRA problems could hurt Texans
Texas residents are faced with a loss of jobs in Dallas, Houston, Austin, or throughout the state, once had a big problem when it came to health care.
Before the arrival of federal law commonly known by its acronym – COBRA (short for the Consolidated Omnibus Budget Reconciliation Act of 1985) – leaving a job typically means losing coverage if the employee left for another job or were terminated for reasons other than "gross misconduct."
Since passage of the Act, the same workers have COBRA working for them, the option that requires the ability to follow the pattern of health insurance plan for up to 18 months, although this can be quite costly, as former employee typically has to collect 100% of the cost.
The introduction of COBRA also comes with its own set of precautions, as the window to register a continuation of coverage from an employer is very narrow. It is also "one way", which means that once a former employee says "no thanks" the business plan COBRA (or simply choose to buy an individual plan) can not come back later.
But those who are healthy, and whose families are in the same category, are wise to consider individual health insurance plans in place, as the premium rates may be significantly less than the cost of a policy comparable COBRA health insurance group.
How much less? In some cases, half the expense. The reason for the cost difference has to do with who pays the cost of group health coverage. For most companies, the employer foots a significant portion of the cost for active employees.
What about an employee whose company is not subject to COBRA? Some states have adopted their own version of the idea behind COBRA, in some cases, those plans are still more flexible in determining who is eligible for continuation coverage of health insurance. Under COBRA, the changes in the employer's health plan: former employee will receive new benefits. In addition, a change by the employer to a plan entirely new: the former employee shall also change.
Another "all or nothing" COBRA aspect has to do with a business plan that has a plan with multiple benefits for health insurance. If that is the case, the former employee can not "separate" coverage, with the exception of a plan that allows for all who are in the plan.
Although eligibility may be a consideration for those looking for COBRA, is not unique. Those without pre-existing conditions and feel it is too expensive COBRA will have to consider buying individual insurance during the time between posts work to cover a period of waiting for a new job, or even opt for coverage in a new job if the cost and benefits are more attractive, with a individual plan.
There are several forms of health insurance coverage are subject to COBRA regulations, including medical, dental, vision, and prescription drug plans, drug and alcohol Treatment Programs, the Employee Assistance Plans (known as EAP, providing services such as counseling treatment or psychological), the field of health under certain circumstances, care (including discounts or free medical services) and, under section 125 spending arrangements, also known as cafeteria plans.
The benefits are not subject to COBRA include wellness programs, life, disability and long-term plans care insurance and medical savings accounts, and CAS do not provide medical care.
About the Author
Pat Carpenter writes for Precedent Insurance Company. Precedent puts a new spin on health insurance. Learn more at Precedent.com
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