Cobra and its California expanded version, Cal-Cobra refer to a set of laws that address the rights of employees coming off of group health insurance plans. We can quickly get bogged down in the legal speak associated with any health-related law that comes out of Congress but let's try to boil it down so we can wrap our heads around the main points and how it affects your options in the California health insurance market.
First of all...in layman's terms...what is Cobra? Essentially, Cobra is continuation of group coverage available to you and covered dependents after you leave a group plan. You may be terminated or leave voluntarily. There are only a few reasons Cobra might not be available such as termination due to fraud or gross misconduct. Otherwise, if the health plans was a qualified group plan and remains intact, you may have a Cobra option even if you were only on the plan for 1 month. What exactly does this mean?
When you leave a group plan, the carrier or company (depending on it's size) will send you a Cobra option letter or packet. You typically have 62 days from the last date of group health insurance (or upon receiving the letter but the letter should state the time-table) to elect Cobra with an effective date retro-active back to the last date of coverage (day after, actually). This way, you can have continuous coverage. Be careful...if you lapse this window without electing Cobra, the option is gone and Cobra is very strict about election and premium payment which brings us to the next key point.
With Cobra or Cal-Cobra, you pay the monthly premium yourself and the bills come directly to your address so make sure the prior carrier or administrator has the correct address on file. The premium is typically 10% higher than what the carrier charged the group for smaller group. Keep in mind that Cobra election may provide a qualifying event to change plans if other plans were available to the group. You may use this time to downgrade coverage for example since California group health plans can be very expensive. You can also piece meal Cobra in most situation.
Cobra typically lasts up to 18 months but you may also have a Cal-Cobra extension which can extend it to another 18 months. The carrier or administrator should be able to confirm if a Cal Cobra extension is available. Just make sure to use that terminology so they know what you're talking about. Some situations (death, divorce, etc) may automatically result in a 36 month Cobra period anyway. The coverage offered by Cobra will be identical to the plan you had through the company although the company may change plans (due to rate increase for example) during the course of the year and this may affect your plan as well.
In terms of comparing Cobra and shopping for your own California individual health insurance plan, individual will usually be quite a bit cheaper for comparable coverage. The networks are generally smaller on the individual family market (whether through Covered California or off-exchange). With Covered California, it's very important to evaluate that option first. Many people qualify for a tax credit which can bring down the cost significantly.
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