What is COBRA insurance?

COBRA stands for The Consolidated Omnibus Budget Reconciliation Act of 1985. COBRA gives employees who’ve lost group insurance the option of continuing their health plan on a temporary basis. COBRA health insurance is not always the first choice for medical coverage. However, there are a number of situations when COBRA is the right choice.

When is COBRA health insurance the best option?

COBRA could be the best option for someone in one of the following situations:

  • If you can’t qualify for other medical coverage due to pre-existing conditions, consider getting COBRA health insurance. It is not medically underwritten, so there are no denials for pre-existing conditions.
  • If you worked for a large company (50 or more employees), the COBRA insurance cost could be better than your other options. That is because large groups can get more competitive insurance rates due to their company size. So although a COBRA health insurance plan usually carries a higher price tag, it is sometimes more cost effective than other insurance options.
  • You can be on COBRA insurance for 18 to 36 months. This is not a very long time, but if you are nearly eligible for other health care, it may be long enough. For example, if you started a new job and you had to wait a few months before becoming eligible for health benefits, signing up for COBRA health insurance may be a smart move. This would be especially good if you or a covered family member is pregnant or in the middle of treatments. Enrolling for COBRA would also work well if you are 18 months away from being eligible for Medicare.
  • If you like your medical plan and the COBRA health insurance cost is manageable, then, stay on it for as long as you are able. Since the reason people end up on COBRA is due to a life event change, such as a job loss or divorce, then, keeping your health plan would mean one less change to handle.

When is COBRA insurance not the best option?

COBRA health insurance tends to be pricey and you can stay on it for a limited period only. So, it’s not for everyone. Consider going with another health insurance plan if that medical coverage is more affordable, the benefits match your medical needs better, or it gives you insurance beyond an 18 to 36 month stop point.

Health Insurance Cobra Enrollment

COBRA rules are strict. If you decide to pursue coverage, be sure to enroll within 60 days from when you become eligible. There’s no grace period if you miss the deadline. Also, it’s important to pay the premium on time. If you are late, you will be cancelled without a reinstatement option. If you’re undecided or need more time, it may be wise to enroll for COBRA insurance and then cancel after you find a better plan.