Consider COBRA Medical Insurance If You Lose Your Job

In 1986, the COBRA medical insurance provisions were voted into law in the U.S. This law changed several federal laws, including the Internal Revenue code and the Employment Retirement Income Security Act, among others. These changes required certain companies to continue employer-sponsored group health insurance that would otherwise be terminated by layoff or similar circumstances. The COBRA medical insurance law enables employees to retain medical insurance between jobs at the rate and benefits available to their former employer.

COBRA medical insurance generally applies to companies employing 20 or more employees that have a company sponsored group insurance plan. The law does not apply to any government agency of the District of Columbia, or any U.S. territory or possession. Certain church-related organizations are not subject to the COBRA medical insurance laws. Strangely enough, COBRA medical insurance laws do not apply to the federal government! Instead of COBRA, the U.S. federal government offers a similar insurance continuation program under the Federal Employees Health Benefit Program.

If you work at a company that provides group insurance, find out now whether the company is subject to the COBRA medical insurance laws. If so, find out how long the COBRA coverage is effective after employment ends, and how much it costs. You might be uncomfortable asking these questions, because it can appear that you are about to leave the company! However, you have a right to know your COBRA medical insurance choices, how long they last, and how much they will cost. It is better to find out now than on the day you are laid off or have to quit for other reasons.

If you have to utilize the company's COBRA medical insurance, you will be expected to pay the premiums each month. You will pay what the company pays for the employee premiums. The company may charge you a small processing fee, which is legal. The COBRA medical insurance grants you the same health insurance benefits you had as an employee. This is a huge relief if you find yourself out of work for a long time. COBRA medical insurance coverage doesn't last forever though. The insured period is usually about 18 months, although this may vary depending on your circumstances.

If you are laid off by no fault of your own, you are very likely eligible for COBRA medical insurance coverage. You are probably very angry at that point, and the last thing you want to do is to send a check to your ex-employer every month. Don't give in to that temptation. Don't think of COBRA medical insurance as you sending a check to the employer you don't like. Think of it as you making them continue to insure you! COBRA medical insurance is one of your employee rights and it is a wise decision to put your personal feelings aside and continue the policy until you find another job.

Copyright 2007 Jim Sterling - All Rights Reserved

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