COBRA - What Is It and How Does It Work?

http://www.staysmartstayhealthy.com COBRA allows you to continue your healthcare coverage for up to 18 months. With COBRA certain people with a disability are allowed 11 additional months. And, even if you choose not to extend your health insurance coverage immediately after you leave your job, you have a grace period in which you can still enroll.

Todays question: What is COBRA and how does it work?

The simple answer is: Its an opportunity to continue your employer-sponsored health insurance when you lose your job.

So, COBRA isnt the venomous, yet charming snake.

Under federal law, COBRA gives you the right to temporarily continue purchasing the group health insurance you had at work when you leave your job due to a qualifying event.


COBRA stands for Consolidated Omnibus Budget Reconciliation Act - which explains why they call it COBRA.


It applies if your company's group health plan covers 20 or more workers, and in instances of a qualifying event.
These events include having your hours cut,
quitting your job, or being let go for a reason other than gross misconduct, like stealing.

In general, COBRA allows you to continue your coverage for up to 18 months.

Certain people with a disability are allowed 11 additional months. And, even if you choose not to extend your coverage immediately after you leave your job, you have a grace period in which you can still enroll.


Lets say Gary loses his job due to cutbacks because nobody is buying his companys battery-operated flyswatters.

Because losing your job is a qualifying event, Gary can use COBRA to cover himself and his wife, provided she was covered in his health plan at work. Gary's wife can continue to use COBRA if Gary becomes entitled to Medicare and gives up his group coverage, if there is a divorce or legal separation, or if he goes to that great golf course in the sky.

Dependent children who were covered by his plan can use COBRA in those same cases. They can also extend their coverage when they are no longer considered dependents.

When you use COBRA, you are responsible for paying 100% of the cost, plus an administrative fee. That means you pay what you paid as an employee, plus what your employer paid, plus 2%.

This may still be less expensive than an individual policy with similar coverage, so do your research.

This just in!

With the approval of the new Stimulus Package, COBRAs terms have changed.

Individuals who are eligible for COBRA except those who left their jobs voluntarily may qualify for a 65% subsidy for nine months.

Thats big!

Lets say Gary is laid off from Global Flyswatters, Inc. between September 1, 2008, and December 31, 2009.

He is now qualified to get COBRA coverage for just 35% of the total cost even if he already declined it.

That means, if Gary's health insurance cost his company $300 a month, and cost Gary $200 a month, his total insurance cost was $500 a month.

Under the new stimulus plan, Gary would be eligible for COBRA for just $175 a month. He's eligible as long as he isnt what they call a high-income individual that is, a single tax filer with an adjusted gross income of $125,000 or more, or a joint filer with income over $250,000. Not a problem for Gary. To sum it up, when you leave your job due to qualifying events, COBRA gives you the opportunity to continue purchasing the group health insurance you had for yourself and your dependents for a limited time when you leave your job due to a qualified event. Normally, you pay 102% of the cost. But with the new stimulus package, qualified individuals are entitled to a subsidy that covers 65% of the total.




Stay Smart Stay Healthy was created by Edward Batchelor at Humana Inc. as a new-media venture designed to deliver guidance, and to support awareness and understanding of the healthcare industry.

His goal was simple: to educate consumers on the healthcare system by removing the usual complexities and replacing them with an informative and engaging series of videos.

Category:

Education

Tags:

• Healthcare
• COBRA
• Health
• Insurance
• Humana
• stay
• smart
• healthy
• Edward Batchelor
• Ed
• Batchelor

[TheSemiAmericans]

COBRA COMMANDER

[Joey2Tube]

I wish all teachers at school would teach like this!!

[just1believer]

and so my friends americas health care just turned into a big a democratic party business. the end

[tallcoolone1]

or sometimes $900, ,it is totally worthless..

[tallcoolone1]

COBRA is a joke. Just another giveaway to the health insurance industry. They love it...You pay your premium for 20 years, then get divorced, and they get a free shot at dumping you just when you need help the most. This is another reason the OBAMA bill is necessary. The HMOS can stick COBRA up their ass. You are better off with nothing, go to public hospitals, and declare bankruptcy if you have an emergency.

[ObamaOrNoHealthcare]

These comments are treasonous- I am reporting you all to FlagatWhitehousedotGov

[edy0218]

this videos are awesome..... really

[doitnotagain]

I don't think Heaven is no big golf course in the sky

[muaythai614]

Yes you do get taxed that 65 percent.. NOTHING IS FREE!!!..I work for one of the largest health care companies in this country.. and this is the most asked question...DAILY!!!! ask me!

[muaythai614]

In the state of california it is actually 110% of the normal premium that the employer was being charged..cal cobra is employer groups 2-19 employees..for an example.. If your employer was being charged $375 you will pay 10% on top of that if you elect cal cobra once you are laid off. If it is federal (20+) the most can be 102%.The stimulus is for 9 months once you elect, must be cancelled after 09/01/08.. and yes you will be 1099 for the 65% nothing is free, I know..I work for Anthem Blue Cross

[ibkukin]

What the video does not mention is that you are taxed on that 65% as INCOME at the end of the year. All that glitters in not gold people.

[SilVeRS1325]

I knew someone was gonna write that! :D