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COBRA Insurance Guide: What is it & How Does it Work – Aetna | How Much Does it Cost, How Long Does it Last, & More Questions

When Dale, 45, quit his job to take another position, he knew there was a three-month waiting period before he was eligible to enroll in his new employer’s health plan. Around the same time, her friend Debra, 62, was laid off from her job and would soon lose coverage for herself and her spouse.

Fortunately, Dale and Debra can stay on their employer-sponsored health insurance under Cobra, also known as the Consolidated Omnibus Reconciliation Act. Cobra is a federal law passed three decades ago to provide families with an insurance safety net between jobs. It’s available if you’re already enrolled in an employer-sponsored medical, dental, or vision plan, and your business has 20 or more employees. your spouse/partner and dependents may also be included in your cobra coverage.

Reading: Cobra insurance how to apply

Here are 5 questions to ask before you sign up for cobra benefits:

1. what is my deadline to sign up for cobra?

Your employer has 44 days from your last day of work or last day of insurance coverage (whichever is later) to submit cobra information. but it’s a good idea to check with your benefits administrator a couple of weeks after you leave.

You will have 60 days to enroll in Cobra, or another health plan, after your benefits end. but keep in mind that delaying enrollment will not save you money. charges is always retroactive to the day after your previous coverage ended, and you must also pay your premiums during that period. One of the benefits of joining right away is that you can continue to see doctors and fill prescriptions without breaking coverage.

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cobra allows you to keep exactly the same benefits as before. no changes can be made to your plan at this time. however, if you are still on cobra during the next open enrollment period, you can choose another plan that your former employer offers to employees. the new plan will take effect on January 1.

2. How much does it cost?

Most companies pay most of their employees’ health plan premiums, with the rest deducted from their paycheck. On average, workers contribute 20% of the premium for individual coverage and 30% for family coverage. Under cobra, you will be responsible for 100% of your premium, so your monthly cobra payment can be 5 times your payroll deduction.

Although it may seem like a lot of money, cobra premiums are often less than what you would pay on the open market, because you still benefit from your company’s group discount.

if you have a health savings account (hsa), you can pay your collect premiums with those funds. (Insurance premiums are typically not an HSA-eligible medical expense.)

During the next open enrollment period, you can choose to switch to a less expensive plan. High-deductible health plan (HDHP) premiums, for example, are considerably lower than other types of plans for both individual and family coverage.

3. How long will my coverage last?

See also: How to Get COBRA Health Insurance After Leaving Your Job

although cobra is temporary, you will have time to find another plan. Federal coverage lasts 18 months, beginning when your previous benefits end. some states extend medical coverage (but may not include dental or vision) to 36 months. check with your benefits administrator to find out if your state extends cobra benefits.

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Some benefits have a lifetime limit, but that is not the case with Cobra. each time you enroll, you are entitled to the same benefits for the same period of time.

4. what are the alternatives to charge when i leave my job?

cobra isn’t your only option when you lose your employer-sponsored plan. Depending on your situation, you may qualify for other health benefits:

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