Navigating Cobra Insurance: A Guide To Submitting Doctor Bills

If you've lost your job, had your hours reduced, or experienced another qualifying event, you may be able to maintain your employer-provided health insurance with COBRA, the Consolidated Omnibus Budget Reconciliation Act. This federal law allows qualified workers to keep their group health insurance for a limited time after a change in eligibility. COBRA coverage is available to those who were enrolled in an employer-sponsored medical, dental, or vision plan, and the company has 20 or more full-time employees. You have 60 days to enrol in COBRA once your employer-sponsored benefits end. To submit a doctor bill to COBRA insurance, you should follow the plan's rules for filing claims, which should be outlined in your COBRA paperwork.

How to apply for Cobra insurance

COBRA, the Consolidated Omnibus Budget Reconciliation Act, lets qualified workers keep their group health insurance for a limited time after a change in eligibility. It applies to most private sector businesses with 20 or more employees.

To apply for COBRA insurance, you must meet three basic requirements:

• Your group health plan must be covered by COBRA.
• A qualifying event must occur.
• You must be a qualified beneficiary for that event.

Qualifying events include:

• Termination or a reduction of a covered employee's hours
• Divorce or legal separation from a covered employee
• Death of a covered employee
• Medicare eligibility for a covered employee
• Loss of a child's or dependent's health insurance coverage under the plan

If a qualifying event happens, you or your employer will notify the health plan. The plan will then send an election notice that you will have 60 days to respond to. If you elect to take COBRA coverage, your employer may pay a portion of or the full amount of your insurance premium.

To get more information about COBRA benefits, read the publication from the U.S. Department of Labor (DOL).

Cobra insurance cost

COBRA insurance is a federal law that allows employees and their families to maintain their group health insurance plan for a limited time after a change in eligibility. This applies to most private sector businesses with 20 or more employees and qualifying events include termination, reduction of hours, divorce or legal separation, death, and Medicare eligibility.

The cost of COBRA insurance is often misunderstood. While employed, the employer typically pays a portion of the health insurance premium, with the employee paying the remaining amount. With COBRA insurance, the individual must pay the full amount of the insurance premium, including the part previously covered by the employer, plus an additional 2% administration fee. This means that the cost of COBRA insurance is the total amount previously paid by the company and the employee, without any subsidy from the employer.

The average monthly cost of COBRA insurance premiums ranges from $400 to $700 per individual. However, the cost will vary depending on the type of group coverage, the provider network, and the location. For example, in 2021, the average premium for individual coverage on a workplace plan ranged from $6,340 per year in Arkansas to $9,037 per year in Alaska.

To calculate the cost of COBRA insurance, add the amount the employer has been paying toward the premiums to the amount the employee has been paying, and then add a 2% service charge. For example, if an employee has $125 taken from each paycheck for health insurance and gets paid twice a month, their portion of the monthly premium is $250. If the employer contributes $400 per month, the total cost of the job-based plan is $650 per month. Adding a 2% service charge brings the total monthly COBRA premium to $663.

It is important to note that COBRA insurance is not the only option for maintaining health coverage after leaving a job. Alternatives include marketplace plans, a spouse's workplace plan, Medicaid, and short-term health insurance.

Cobra insurance duration

The duration of your COBRA insurance coverage depends on the event that made you eligible. COBRA insurance can last for 18 months after losing a job, with a chance for more time in certain situations. For other qualifying events, such as divorce or the death of a spouse, dependents may receive up to 36 months of coverage.

Under COBRA, employees themselves are eligible for either 18 months of coverage or 29 months of coverage. The latter is applicable if a qualified beneficiary on the plan is eligible for a disability extension. This occurs when the individual is determined to be disabled by the Social Security Administration before the 60th day of COBRA coverage and remains disabled for the initial 18 months of coverage. The 11-month extension begins at the conclusion of the original 18 months of coverage.

Additionally, covered employees who enlist in the military or are called to active duty have COBRA-like coverage rights for themselves and their dependents that last for up to 24 months.

Dependents who are qualified beneficiaries are eligible for the same coverage durations as employees. However, their coverage may extend further in certain situations, such as losing dependent-child status under the plan or when there is a second qualifying event during continuation coverage.

Cobra insurance alternatives

COBRA insurance, or the Consolidated Omnibus Budget Reconciliation Act, is a helpful way to maintain health insurance coverage after leaving a job. However, due to its high cost and temporary nature, it may be worth exploring alternative options. Here are some alternatives to COBRA insurance to consider:

• Short-term health insurance: This is a valuable temporary solution for those transitioning between jobs or health plans. These plans are often more affordable than COBRA but may offer less comprehensive coverage and typically exclude pre-existing conditions.
• Medicaid and other government assistance programs: For individuals with limited incomes, Medicaid provides a no-cost or low-cost alternative. Eligibility varies by state but is generally based on income and family size. Other programs, such as the Children's Health Insurance Program (CHIP), offer coverage for those who may not qualify for Medicaid.
• Marketplace insurance: Available through the Affordable Care Act (ACA), marketplace insurance often provides more affordable options than COBRA, with a range of plans suited to different needs and budgets.
• Spouse's plan: Losing your job triggers a special enrollment period that allows you to join your spouse's health insurance plan.
• ACA Marketplace Health Insurance: Under the ACA, you can obtain a healthcare plan through your state's health insurance marketplace. This option is available to anyone lawfully residing in the US and not in jail or prison. Financial assistance from the government may also be available to help reduce or eliminate the cost of premiums.
• Independent Health Insurance: If you don't qualify for premium assistance with an ACA plan but want broader coverage than a short-term plan, you can consider independent health care plans from private insurers outside the ACA Marketplace. While these plans don't receive premium assistance, they often offer good coverage at a lower cost than COBRA.
• High-deductible health insurance: Opting for a high-deductible plan can reduce your monthly costs, regardless of whether you choose a short-term, ACA, or independent health plan. These plans have lower monthly premiums but require you to pay more in upfront healthcare costs before the insurer covers your expenses.

Cobra insurance eligibility

To be eligible for COBRA insurance, three basic requirements must be met. Firstly, your group health plan must be covered by COBRA. Secondly, a qualifying event must occur. Thirdly, you must be a qualified beneficiary for that event.

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, applies to most private sector businesses with 20 or more employees. It requires an employer's group health insurance plan to continue after qualifying life events. These include:

• Termination or a reduction of a covered employee's hours
• Divorce or legal separation from a covered employee
• Death of a covered employee
• Medicare eligibility for a covered employee
• Loss of a child's or dependent's health insurance coverage under the plan

A "qualified beneficiary" is an individual who is entitled to COBRA continuation coverage because they were covered by a group health plan on the day before a "qualifying event." Depending on the circumstances, the following individuals may be qualified beneficiaries: a "covered employee" (a term that includes active employees, terminated employees and retirees); a covered employee's spouse and dependent children; any child born to or placed for adoption with a covered employee during the period of COBRA coverage; agents; self-employed individuals; independent contractors and their employees; directors of the employer; and, for public sector group health plans, political appointees and elected officials.

Frequently asked questions