Cobra 60 Day Election Period

The Cobra 60 day election period is essential to thoseTom to pay one hundred dollars per month. Tom's
individuals who have been laid off or involuntarilyactual plan cost two hundred dollars per month.
terminated. Unfortunately, corporate layoffs have risenHowever, his employer pays fifty percent of his
over the past few years. In fact, layoffs have becomemonthly cost. Once Tom has been laid off, he is eligible
so common that there are many well-qualifiedto elect Cobra for health coverage continuation. Cobra
individuals who have settled for part-time work at localwill allow Tom to keep his current coverage and cost.
convenient stores in order to make ends meet. TheHowever, Tom's employer is not required to pay the
Cobra 60 day election period becomes essentialfifty percent of his monthly cost. Therefore, in order
because it gives an individual time to pursue all healthfor Tom to keep the same plan, he must now pay
insurance options and determine which option will besttwo hundred dollars per month (the full monthly cost).
suit him/her.Based on the example above, Tom could use the
Once an individual has been laid off or involuntarilyCobra 60 day election period to his advantage in a
terminated, he or she has 60 days to elect Cobracouple of ways. First, Tom does not have to
coverage. During the 60 day period, the individual mayimmediately elect Cobra. He can use the sixty days to
investigate cobra options as well as individual healthresearch individual health plan options. Many times, an
insurance quote options. Typically, individuals find thatindividual health plan would be a cheaper option for
the cost of their cobra care is more costly than theirTom since individual health plans are based on the
previous coverage. This leads to the popularhealth of the individual vs. Toms previous employer
misconception that Cobra itself is expensive. Cobragroup plan based on the general health dynamic of a
(Consolidated Omnibus Budget Reconciliation) is an Actgroup. Second, Tom may be one of the lucky ones
adopted in 1985 that enables individuals who havewho finds a new job and/or insurance quote quickly. If
been involuntarily terminated to continue their currentTom's new job allows health coverage to start prior to
health care plans for a designated time frame (based60 days from his previous termination, Tom could use
on the state and number of people employed by thethe Cobra 60 day election period to his advantage. In
employer). The fact that the act allows for an individualthis instance, Tom could actually save the cost of
to continue their current health plans means that aninsurance during the cobra 60 day election period as
individual has access to the exact same healthlong as he does not get sick. If Tom's new insurance
coverage as they did prior to being laid off (includingstarts within the 60 day period then Tom would simply
the same cost). Typically an individual's employer willnot elect Cobra. However, if Tom's coverage starts on
pay a portion of the individual's health care. Many timesday 50 of his termination and Tom gets sick on day
the amount that the employer pays could be up to fifty40, then Tom would benefit from the Cobra 60 day
percent. Being that the individual has access to theelection period and be covered based on his previous
same health coverage and cost under a cobra plan,health coverage. The downside to this is that Tom
the additional cost (previously covered by thewould have to pay the cost of the Cobra for the
employer) must be covered by the individual. For theprevious month (the full 60 days). However, at least
sake of clarity, we'll provide an example below:Tom would have options. Knowledge is power.
Tom has a (employer group) health plan that requiresStay tuned and stay informed!