Choosing When to Elect COBRA Coverage

There are times when COBRA coverage is excellent, and times when it’s not ideal. Learn how to choose whether to accept or deny.Chances are, you’ve heard the term COBRA in relation to health insurance – especially where layoffs are concerned. It is a stimulus bill subsidy that provides employees with the right to keep their employer’s insurance for a certain period of time after a qualifying event. It can be very useful if you’re in between jobs and suffer a medical emergency, although it tends to be rather expensive. The worker is required to take over the cost of their insurance fully. The costs can add up quickly for families, but so does the fee for not having insurance.


For important questions about COBRA coverage, trust the experts at Cypress Benefits Group.


Why People Use COBRA Coverage


Despite the cost, COBRA coverage has certain benefits. For one, your health care plan stays exactly the same, aside from the premium. Qualifying events include both termination and divorce, so it’s nice to know that your insurance is one less thing to contend with for a while.


COBRA can also be beneficial to people with existing health conditions, and it can also prevent coverage gaps while you’re between jobs. Since the Affordable Care Act fines you for each month you’re without coverage, even the full cost of the premium could be smaller than the potential fines.

When You Shouldn’t Use COBRA


In spite of the attractive benefits, there are cases when accepting COBRA doesn’t make sense. This is particularly true for workers who are young and in good health. It’s likely your COBRA premium is much higher than private insurance would be. In some cases, finding an individual provider can be cheaper than the portion you would pay through an employee, too. That means you can choose to have your own plan and customize it how you see fit.


If your qualifying event will be resolved quickly, you probably don’t need COBRA. This is best illustrated by someone who is terminated from a company but has another job lined up. If you can enroll in a new company’s insurance before receiving any penalties, there’s no reason to rely on COBRA. This is also something to consider if the event happens during an enrollment period on someone else’s insurance, such as your spouse.


The COBRA stimulus bill has positive and negative aspects, and it’s important that you make the decision that best fits your life. Don’t make such an important choice without truly exploring what you need to know. Talk to the specialists from Cypress Benefits for more information.

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