What
Happens to Your Health Benefits if You Stop Working?
Many
of us receive our health insurance benefits through our
employment, or through our spouse's employer. What happens
to your health benefits if you are laid off, or if your
spouse dies, or if you divorce?
The
Consolidated Omnibus Reconciliation Act of 1986 (COBRA)
entitles employees and their dependents covered by an employer's
health insurance plan to continue coverage after employment
has terminated, or when an employee is otherwise ineligible
to receive health benefits through the employer.
What
COBRA Does
COBRA allows you to continue your health benefits if:
- Your
employment is terminated
-
Your hours are reduced to the point where you no longer
qualify for your employer's health benefits
- You
divorce your spouse
-
Your spouse dies
Who
Offers COBRA?
Most larger employers are required to offer COBRA coverage.
COBRA coverage will allow you to continue your health insurance
for up to 18 months if your employment was terminated or your
hours were reduced. Coverage may continue for up to 36 months
if your entitlement is due to other reasons, such as disability,
death or divorce.
Who
Pays COBRA Premiums?
Under COBRA, you, not your employer, are responsible for paying
the health insurance premium. The premium will typically be
higher than the premium paid by your employer, but generally
less than the premium amount you would pay if you were to
acquire individual coverage on your own.
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