Quit Your Job And Get COBRA's Help

Are you thinking of quitting your job but is afraid that you won’t have anything to spend if someone in your family gets sick while you’re looking for another one? Check if your company is covered by a COBRA. If it is, then you have nothing to worry. You and your family will still be covered by your company’s health plan for one year, that is, if you still were not able to land another job.

What is COBRA?

COBRA is short for the Consolidated Omnibus Reconciliation Budget Act. It is a federal law that enables you and any member of your family to be covered by your employer’s health plan but only under certain conditions. These conditions include

  • You lost or you quit your job
  • Your employer died
  • You are no longer a dependent because of your age
  • You divorced the employee

COBRA Does Not Cover Everyone

COBRA is not applicable to all. To qualify for COBRA, your employer must have at least 20 employees on its payroll reckoned in the previous year. Although local and state governments fall under COBRA, certain religious groups and federal plans are not covered. However, if you are a federal employee, you have a number of similar rights provided by another law. You have to ask the Human Resource Department of whatever government institution you are connected with about this. But more importantly, COBRA will not be applicable to you if you are fired due to “gross misconduct.”

If there is no health plan in your place of work, you won’t be able to get the benefits of a COBRA. The Department of Labor also states that it does not apply to employees of private sector companies if the total number of employees is less than 20. Many agencies and branches of the federal government are not covered. But some religious organizations and some churches are exempted.

COBRA Can Be Costly

Not all companies choose to have COBRA because it is generally expensive for their employees. Employees of companies with COBRA pay all the premiums, plus a portion of the premiums paid previously by their employer, and an administrative fee of 2 percent. An alternative to COBRA is to check if you will qualify to purchase a health plan by way of the Washington Healthplanfinder which offers a subsidy for the payment of insurance premiums. If you choose to enroll in COBRA and then decide to transfer to a health plan with Healthplanfinder later on, you may need to wait for the following open enrollment period before you can be covered again.

How To Apply For COBRA

First, check your company handbook for information regarding its health insurance. Check if your company’s health plan falls under COBRA. If you can’t find that information, ask the person who is in charge of employee benefits in your company. If you are quitting your job, it is your employer who should notify the insurer on your behalf. Then the administrator of the health plan should contact you. He will offer to sign you up with a COBRA. This process should be accomplished within 14 days or less after leaving your job. Within the next 60 days, you have to decide whether to enroll or not.

How Much To Pay For The Premiums

With COBRA, you will be provided with the same benefits that you have before you quit your job. But you may need to pay more. If your employer has paid a portion of the premium, he can demand that you pay the entire amount. This will increase your expenses. In addition, it is possible that 102 percent of the premiums will be charged by the insurance company. On top of that, you may also need to pay another 2 percent for administrative fees.

There Are Other Alternatives

If you think COBRA is too expensive, there are other alternatives that you can consider. If you have a spouse who is covered by her employer, you can qualify under her plan if you quit your job. Quitting your job and your previous health plan will also qualify you for coverage of the Affordable Care Act of the federal government, within its special enrollment period. You can also search for healthcare companies that offer cheaper health care plans.