The hiss of the COBRA insurance coverage

You may feel like taking a little break from your drab working life, or you may be willing to give up your present job to look for better opportunities. Either way, the group health insurance plan that had been protecting you all along, will be removed. That might leave you vulnerable, till the time you get a new job, and get covered by a new group health plan. In case you or any of your family members fall ill during the gap in coverage, you’ll have to bear the expenses of diagnosis, treatment and medical care on your own. Well, you can evidently opt for an individual health plan within that time. Otherwise, you can always go for the COBRA plan.

What is COBRA?

COBRA is the abbreviated form of the Consolidated Omnibus Budget Reconciliation Act, which was introduced in 1985. The best provision that comes along with a COBRA is that the individuals can keep their existing health care coverage active even after voluntary or involuntary job loss. Though for a limited time period, the COBRA offers insurance protection to you and your family, till the time you get any other medical protection.

What is the 'hiss'?

Well, there is a somewhat disadvantage associated with the COBRA, that can count as the ‘hiss’. The cost of group health insurance is partially borne by the employer. However, if you opt for a COBRA, you’ll have to pay the whole premium amount for the heath care coverage. Since, you may not be earning at the time, this might count as a huge pocket pinch.

How can you reduce the cost for COBRA insurance?

Paying expensive premiums for the COBRA coverage might bother you a lot, since you won’t be having a steady source of income at that point of time. Thus, sticking to a few smart steps will help to keep your costs in control.

1. Buy COBRA insurance for a limited period of time, say for 2 to 3 months. Within that time period, if you land up with a new job, the employee group plan will come into effect. Or else, you have to apply for a new health insurance policy for personal coverage.
2. When applying for an individual health care plan, try to reduce the insurance premiums as much as possible. Opt for a higher deductible and maintain a healthy lifestyle.
3. If someone in your family is denied coverage by the regular insurers, then buy COBRA coverage for them only. Those who can easily purchase their insurance protection should get an individual policy, and not COBRA insurance. This will cut down the costs to a great extent.

Thus, the most sensible way to reduce the COBRA’s cost is to mix it with a private health insurance policy. With a COBRA, you may also have the option to choose the employer health plan offering the lowest rates. As for the companies with less than 20 employees, individuals can’t opt for the COBRA plan. They can try for the state-run ‘mini-COBRA’ plan instead.