Smart Ideas: Revisited
In the US, the law demands that employers who have fifty or more workers who are employed on a full-time contract should offer health insurance coverage for them. The employer is obligated to pay the premiums of health insurance policy for the employee. The employer can stop paying the health insurance premiums for the employee and terminate the policy if the employee is fired or cannot work the minimum number of hours he or she was contracted to work.
Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance covers an employee who is eligible for the insurance and his or her dependents in case the employee is fired or the working hours are reduced if the employee accepts to take on the responsibility of paying the premiums.
Disability insurance and life insurance are excluded in COBRA insurance, but it pays for prescription drugs, vision care, and dental treatments. You will be able to access large supplies of drugs at a discount, use generic drugs and get services from retail clinics and low-cost community clinics when you have COBRA health insurance.
COBRA is more affordable than an individual health insurance plan offers health insurance coverage at group rates. COBRA has a refundable tax credit that is named Health Coverage Tax Credit (HCTC), and you can save money because of the tax deductions that are offered in COBRA.
You can request for the duration to be extended, but the benefits of COBRA insurance normally last for eighteen months. You will be charged the full cost of the insurance and an administrative premium. You can save money by using the amount of money you have saved up in your Health Savings Account (HSA) to pay for COBRA premiums.
If the employee has lost the job was voluntarily or involuntarily except when there is a case of gross misconduct, the person qualifies for COBRA. COBRA covers a person whose working hours have reduced to the level that the individual has lost employer insurance coverage.
The spouse and the children lose the COBRA coverage if the covered employee dies, legal divorce or separation with the spouse occurs, the child turns 26 years hence he or she is above the age of being covered by the parents’ insurance or when the employee qualifies for Medicare insurance. Medicaid and other state or local programs are provided to beneficiaries of low-income employees who have been covered by COBRA.
The reasons for early termination of COBRA are late premium payments; the employees stop maintaining a group health plan, is a beneficiary of another group health plan such as with a new employer, engages in misconduct or qualifies for medical benefits.