COBRA has its share of benefits and drawbacks just like any other type of health insurance program. If you should choose cobra depends on several things, like your goals and budget.
The pros of (Federal) COBRA include:
Being able to keep your current health insurance plan;
No "post claim underwriting” to deny your coverage;
Protects you financially in the case of illness or accident;
not being affected by preexisting condition clauses;
Not have to deal with a multiple carriers and agents which may be required to shop for individual health insurance policy on your own;
No underwriting since you already know you will be accepted;
Less paperwork since your former employer or health plan administrator handles the enrolment requirements;
Flexibility to choose COBRA coverage for yourself, your spouse or children if they can be covered under your former employer's group plan;
Reduced Premiums if you lost your job before June 1st, 2010 if you were involuntarily terminated;
Guaranteed conversion after COBRA ends;
Guaranteed coverage for at least 18 months with no lapses;
Allow spouses and dependents to continue their health plan if they've been unenrolled from the group health plan in anticipation of divorce
The cons of (Federal) COBRA include:
Cost is much higher since your employer is not longer financing a large part of the premium;
Only available to employees of companies with that have at least 20 employees (47 states have some type of coverage continuation law for smaller employers);
Only available to employees that have an active group health insurance plan;
Your former employer may downgrade their health insurance provider plan or sharply raise the premiums (just like you are still an active employee);
18-36 month time restriction;
Have may have conflicts with the supplemental parts of Medicare;
You have to elect if your COBRA election paperwork within 60 days of mailing;
You may have to pay multiple months to avoid lapsing;
Not all terminated employees qualify for COBRA; and
Cheaper alternatives are usually available, if you are healthy.
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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