COBRA and Whether You Should Opt For Permanent Insurance
December 13, 2007
Many millions of Americans are insured through their employers. However this coverage is with them as long as they have their jobs. If they lose their jobs or quit, they would be without coverage. In this scenario they can opt for COBRA (Consolidated Omnibus Budget Reconciliation Act)
COBRA gives an additional 18 months of coverage to employees from firms with a strength of 20 or more employees. In Ohio, “Baby COBRA” allows for up to six months of coverage even for smaller firms.
COBRA is temporary insurance for the uninsured. The former employee may also have to spend a lot. The cost involved is the former plan premiums and a 2% administrative cost.
This means that individuals must look for health insurance once COBRA benefits run out. However if the individual runs into health problems while COBRA is on and before purchasing individual health coverage, then getting comprehensive health coverage becomes difficult.
This means that the individual is well advised to get permanent health coverage while still in a state of good health. If you are accepted for this you can keep it for as long as you want. If you get reemployed, you can drop the coverage or maintain it depending on the advantages and pitfalls.
