Most people purchase health insurance through their employers. Employers purchase group plans at a bulk rate and cover a portion of the insurance cost themselves while employees pay the difference out of pocket. This allows employees to purchase coverage for a much more affordable price than if they bought the policy individually. Unfortunately, this also means that people lose health insurance coverage if they lose their jobs, which can have serious consequences for some people.

Private health insurers will not cover a preexisting condition. In most cases, if a person has had health insurance continuously since before their condition started, it will not be considered preexisting. If they lose their insurance, however, any current conditions may be considered preexisting, and they would be unable to afford coverage. This is especially unfortunate if a person’s health is the primary reason that they lost the job.

Fortunately, there is a temporary solution for people between jobs. COBRA provides a way for an insured to continue receiving health benefits after a job has ended. Depending on the circumstances, a COBRA member can maintain coverage for 18 to 36 months after losing their insurance. For example, people who lose insurance as part of a divorce will have COBRA benefits longer than someone who lost their job.

Health Insurance Solutions for the Unemployed

COBRA isn’t a health insurance policy. It’s a governmental mandate that requires a person have the opportunity to maintain their old group health insurance temporarily, even while not employed. The coverage will cost more than what they traditionally paid from their paycheck since they will need to pay the full premium without employer assistance; there’s also a small fee associated with processing the policy.

Although the cost will be higher, the coverage itself should be identical to the policy you lost. This means that your coverages and deductibles will be identical to the policy you previously held. The same is true for prescription drug or other plans, although you should always review the policy information to make sure that you have the coverage you should.

By default, COBRA will always be effective as of the last day your other insurance policy ends. This ensures that there are no gaps in coverage. You will sign up for coverage after your employment has ended, but the policy will be effective retroactively. The paperwork received after a job has ended will detail when and how to apply for coverage and what the limitations may be.

Can I Cancel COBRA at Any Time?

Although the COBRA will last for over a year while the employee attempts to find a new job, it can be canceled at any time. This may be because the employee is unable to afford the monthly payments, or it may be because they purchased a private health insurance policy.

If the COBRA is canceled in order to begin a new insurance policy, it’s important to let both the COBRA administrator and the new health insurance company know about the situation. This will ensure that there will be interruptions in the policy coverage and that you don’t have any redundant premiums.

Once you stop using your COBRA coverage, you cannot start it again. If you obtain and lose another job with health benefits, you can qualify for COBRA another time, but you cannot otherwise get COBRA twice in a row. Because COBRA benefits cannot be restarted and a coverage interruption can be problematic, it’s important to carefully assess whether it’s a good idea to drop the COBRA coverage before you terminate it.

For people who are unable to afford COBRA, one possible solution is to modify the coverage without dropping it entirely. You can drop plans at any time, but you may need to wait for an enrollment period before changing from one plan to another. Additionally, because all qualifying beneficiaries in your home are covered separately by COBRA, it’s possible to drop a plan for one family member without interrupting coverage for another. For example, you can drop a plan for your spouse or children but maintain coverage for yourself.

Because health insurance can be complicated and you don’t want to lose coverage without warning, it’s a good idea to ask your COBRA provider any questions that you may have about the program. This will ensure that questions relating to your specific situation can be addressed accurately. The COBRA customer service phone number should be listed in the paperwork you filled out to obtain coverage, or you can review their website for additional information.