Group health insurance is a major benefit to employees. Most small to large companies now offer some form of group health insurance to their employees as an additional hiring and retention incentive. What with the cost of health care skyrocketing, having a company pay for all or at least a portion of the health care premiums is a great benefit to have.
Benefits Are Not Always a Guarantee
There was a time, however, when workers would quit or become laid off and the group health insurance ceased as of the same month. Workers found that they were without health insurance for a period of time until they found a new job that offered the benefit or could get an individual or family health plan.
To address these concerns, in 1985, the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, put into law a way for families and individuals to continue their group health care coverage after their employment ends. For up to 18 months a former employee can continue the same health insurance they had up until the time of their termination. This can be a tremendous help for families who may have suffered layoffs as it helps individuals continue coverage when getting an individual policy would be impossible due to pre-existing treatment for a condition.
However, though COBRA made health care continuation a possibility, the financial burden fell upon the former employee. An employee who did not pay any premium for his own insurance, or only had to pay a small percentage each month, needed to pay the entire premium. That sometimes translated into costs of over $1,000 a month for a family health care plan.
Changes That May Benefit Millions
Thankfully, in 2009, the American Recovery and Reinvestment Act signed into law by President Obama has now made it possible for former workers to enroll, or even re-enroll in COBRA, and pay only 35% of the original full premium.
Health care benefits can be a costly expense for those without group coverage. If you are facing a layoff or job loss consider enrolling in COBRA immediately after your employment. The continuation of health care will serve you well when it comes time to enroll in a new plan.
