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Q:  1.) What legislation did COBRA amend? 2.) Where does COBRA not apply? 3.) What 2 documents must be sent to all employees per COBRA? 4.) If an individual quits his job and thinks it will take 3 months to find a new position. What area of COBRA can this person investigate for health care coverage?

A:  We are a company that offers Cobra Alternatives. They are short term major medical plans that cover new illnesses or injuries. They do not cover any pre-existing conditions.  The plans online are alternatives to Cobra. The main difference between this plan and Cobra is that it doesn't cover pre-existing conditions or preventative care.  Short Term Health typically costs less than Cobra. They'll cover new illnesses or injuries.

Following you will find some general information regarding COBRA insurance.

COBRA is the name of a federal law. COBRA contains provisions giving certain former employees, retirees, spouses and dependent children the right to temporarily continue their health coverage at group rates. Your employer is required by law to offer you the continuation of their group health policy for up to 18 months if there are more than 20 employees. You will need to request a COBRA packet from your employer, sometimes the HR dept or benefits manager. They will send you an election form in the mail (they have 45 days to send it) for you to complete. Once you complete this form and return it with in 60 days, your insurance will be retro-active to your last day of employment.  You will not have any lapse or gap in coverage. 

The American Recovery and Reinvestment Act of 2009 (also know as the federal stimulus package) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.

The premium reduction for COBRA continuation coverage is available to "assistance eligible individuals".

An "assistance eligible individual" is the employee or a member of his/her family who:

·        is eligible for COBRA continuation coverage at any time between September 1, 2008 and December 31, 2009;

·        elects COBRA coverage; and

·        is eligible for COBRA as a result of the employee's involuntary termination between September 1, 2008 and December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse's plan) or Medicare are not eligible for the premium reduction. There is no premium reduction for premiums paid for periods of coverage prior to February 17, 2009.

If an individual’s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $145,000 (or $290,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid.

If you are looking for a more affordable option to your COBRA coverage CLICK HERE to get your free quote!