What Is COBRA Insurance?

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COBRA mandates an insurance program that enables you to continue your health insurance for up to 36 months after you lose your job. Learn about COBRA insurance with help from a top insurance attorney in this free video clip.

Part of the Video Series: Disability Insurance & More
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Video Transcript

I'm Frank Darras, America's top insurance attorney, and today we're going to talk about COBRA insurance. COBRA mandates an insurance program that enables you to continue your health insurance for up to 20 or 36 months, in the event you lose your job through no fault of your own. It comes from the Consolidated Omnibus Budget Reconciliation Act or COBRA, that was passed in Congress in 1985. The plan also covers our spouses and our dependent children. Your company must have 20 or more employees, in order to qualify for COBRA. The law doesn't cover plans sponsored by the federal government and certain church-related organizations. COBRA covers in-patient and out-patient hospital care, physician's care, surgery and other major medical benefits, prescription drugs. And any other medical benefits, such as dental and vision. It doesn't, does not cover life insurance. Group health coverage for COBRA participants, is usually more expensive than health coverage for active employees. Since the employer paid a party your premium, that's important. Understand what your employer is paying for your insurance premium and your dependents. So, if you lose your job through no fault of your own, or you get divorced and you lose the benefits. You'll know what to expect when it comes to premiums. Rates can be high due to factors such as demographics, the health plan's design, and the company's group health premiums. That consists of a composite average of all of the employees. COBRA is usually less expensive than individual health coverage, but you can save money by shopping around. And remember, COBRA coverage is time limited, so don't leave yourself bare. Keep the COBRA until you find an alternative with individual coverage. If you're in good health and you have some money set aside. You may want to look for a carrier to provide standard coverage and a choice of deductibles. If you have enough savings to cover a high deductible, in the event of a catastrophic illness or injury. Choose that high deductible and pay the lower premiums, if you plan on getting an individual policy. Be sure to consider if you or any family members have any pre-existing conditions. And determine whether you've already your maximum, out-of-pocket expenses for the year. In either case, if the answer is yes, keeping the COBRA is your best bet. With the new Healthcare Affordable Act, cheap insurance is on the horizon. Do your homework, shop apples and apples. And if you need top insurance help, just ask. I'm Frank Darras, founding partner of Darras Law, Ontario, California.


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