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What You Need to Know about COBRA Health Benefits

Posted October 15, 2009 by Bernz

In today’s unstable job market, the possibility of sudden job loss is on the minds of many Americans. Being downsized in the current economy deals a double blow as it is more difficult to find a new job when most employers are tightening their belts and reducing their workforce.

cobrahealth

Unemployment not only means the loss of a steady income but also the end of group health insurance. That can put a family at risk until a new job picks up the slack. COBRA health benefits can help in this situation.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. The Act was originally drafted in 1986 and has been recently updated as part of the presidential stimulus bill. COBRA provides for a continuation of health benefits for employees and independent contractors in certain situations.

All employers who have 20 or more employees are required to maintain group health insurance benefits for terminated employees for a standard period of 18 months. The catch for the employee is that he or she now has to pay the premium that was once paid by the employer. That can still be a substantial amount of money monthly but it is often less expensive than paying private individual health insurance premiums. (more…)

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