COBRA & Northern California Health Insurance
The Consolidated Omnibus Budget
Reconciliation Act (COBRA) is a type of a health program that allows an
employee and their dependents to continue to receive the benefits of the health
insurance coverage in the event that the employee loses their job or has their
work hours reduced. The program allows for the extension for a limited span of the time given the employee has lost his or her job voluntarily or involuntarily,
is transitioning from one job to another, due to factors such as death,
divorce, and other life events.
COBRA was enacted in 1986 and is a federal
law that allows the employees and their dependents to retain health insurance
as long as they are willing to pay for it on their own. Individuals who are
qualified and eligible are required to pay the entire premium for the health
insurance coverage up to 102 percent of the plan cost. This might seem
expensive and a financial burden, but the coverage cost is cheaper and more
comprehensive than the private health insurance plans.
It is important to remember however that
COBRA health insurance coverage plans cover the costs of prescriptive drugs,
dental treatments, and vision care. It is not inclusive of life insurance and
disability insurance. COBRA program is offered for a limited time period and
from the qualifying date, the coverage extends up to 18 to 36 months, depending
on the scenario.
Under COBRA guidelines it is required that
group health plans provided by companies with 20 or more employees offer
employees and their dependents the opportunity for a temporary extension of coverage
(continuation coverage) a year ahead before coverage would otherwise end.
Guidelines are also provided under COBRA that guides the employees in selecting
the continuation coverages and is a useful resource for Northern California health insurance. It also applies to plans provided by private sectors as well
as plans under the local and state government. COBRA also requires that the
employees provide notice of the plans and the changes. Federal employees are
also provided coverage under the law.
For employees qualifying for the COBRA
coverage, COBRA offers coverage identical to the amount offered by the
employers. All qualified COBRA beneficiaries can make the same choices as
non-COBRA beneficiaries.
A qualified beneficiary of the COBRA program can continue to enjoy the opportunities available to him or her in the
health insurance, including consulting the same doctor and rely on the same
medical network providers. They also get the benefit of continuing the coverage
for pre-existing conditions and daily prescribed drugs.
Eligible beneficiaries of the COBRA the program, upon choosing COBRA can change their health insurance plans from the
employers and choose a less expensive and more suitable plan such as the Health
Maintenance Organization (HMO) or the Preferred Provider Organization (PPO).
Beneficiaries may choose for tax deductions and reduce the burden of higher
premiums. No matter the choices, it is necessary that the premiums for the
COBRA program is made on time, otherwise, the beneficiaries will lose their
coverage duration and become ineligible.
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