Cobra Insurance Alternative

While you were a working employee, your employer may have paid all or part of your group insurance premiums. Under COBRA, your are a former employee and are no longer receiving benefits. You will usually pay the entire premium amount, that is, the portion of the premium that you paid as an employee plus the amount of the paid by your employer. In addition, there may be a 2 percent administrative fee.

In addition, it is likely that there was a lapse of a month or more between the date you were laid off and the time you made the COBRA election decision. You will have to pay premiums retroactively from the time of separation from the company. That means you have to pay for the time you were unemployed but not covered by insurance. This is only worth while if you if you did get sick during that time. Then you should pay the COBRA and use the benefits.

If you are eligible for COBRA coverage because of involuntary termination of employment that occurred between September 1, 2008 and December 31, 2009 and you elected to take COBRA, you may be eligible to pay a reduced premium amount that is 35% of the premium costs for your COBRA coverage but for only up to 9 months.

If you company closed and there is no longer a health plan, there is no COBRA coverage available. The same would be true if the company dropped its health plan. If the company dropped its plan but acquired another plan, you may be eligible for COBRA under the new plan.