Cobra is essentially continuation of a prior group coverage that typically lasts 18 months (can be up to 36 months). You are able to elect Cobra within a 62 day window from your last date of group coverage and continue monthly. Most people do not realize that they have options to Cobra that can significantly reduce their cost as Cobra is typically very expensive in comparison. Below are some general points on Cobra coverage followed by some alternatives to reduce cost.
- Cobra rates are usually 10% higher than what the company was paying for you.
- Cobra is paid monthly and can be cancelled monthly as well.
- If you wait till the end of your 62 day window, you will still need to back-pay first two months of Cobra to bring it current.
- Dependent costs are typically much higher on a Cobra (Group) plan compared to the employee cost. Cobra can be split up. For example, you can get your own individual plan and keep someone who is unable to qualify (based on health) on Cobra. Verify with your Cobra administrator/carrier before you try this.
- If you are unable to qualify for Individual/Family coverage and you exhaust Cobra, then there is typically a HIPAA option available to you. By law, each carrier must offer their two most popular Individual plans on a Guaranteed Issue basis to HIPAA eligible individuals. The rates are higher than qualifying based on health but it does provide a back-up option in case you are unable to get your own Individual coverage. There is also a 62 day window from the last date of Cobra coverage to initiate HIPAA. Please check with us for HIPAA information and/or rates.