USA Health Insurance Option: Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

Today, with the economic situation, millions of Americans are losing their jobs.  And while most workers’ USA health insurance is subsidized by their employers, many Americans worry that when they lose their jobs they will also lose access to affordable health care.  In the US where the cost of health care is high, access to health benefits is considered a necessity.

To address this issue, the U.S. Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA), which was signed by President Reagan to give former employees and their families a chance to continue their health insurance for a limited period of time. This helps offer those who lost jobs health coverage for up to eighteen months, which should be enough time for the person who got laid off to obtain another health insurance through a new job.

When qualified, you are only required to pay 35 percent of your COBRA premiums. The remaining 65 percent will be shouldered by COBRA through a tax credit. The “qualifying events” include: retirement, job loss, job transitions, divorce or death.

February 17 of 2009 is a very significant date. This is the day that the American Recovery and Reinvestment Act of 2009 was enacted. The Act includes a 65% subsidy to employees for up to nine months provided that the employee is qualified to enroll. 

This continuation health law usually covers group health plans sustained by employers who have 20 or more employees in the prior year. It applies to plans in the private sectors and those sponsored by state and local governments. However, it does not apply to plans sponsored by the Federal government and certain church- related organizations.

Qualified beneficiaries for this continued health plan are those individuals who were covered by a group health plan on the day before a qualifying event. Under certain conditions, qualified beneficiaries who participate in a group plan, include independent contractors, agents and directors. A period of 60 days is given to those qualified beneficiaries to elect COBRA. They may elect coverage independently, or on behalf of other qualified beneficiaries, such as parent or legal guardian on behalf of a child.

The following health benefits are provided for COBRA beneficiaries:

* Inpatient and outpatient hospital services

* Prescription drugs

* Physician care

* Surgery and other major health benefits

* Other USA health insurance benefits, such as dental and vision care

Another disadvantage of choose COBRA is that the ex-employee does not need to apply for a new health insurance, which is difficult to obtain especially to people with preexisting conditions. For example, a pregnant woman who got laid off and lost her insurance will also have a hard time getting a new health insurance because of her condition. However, this is no longer a problem as she can choose to continue her health coverage through COBRA.

The Disadvantages of COBRA

Anyone who lost their jobs is encouraged to apply for COBRA coverage. However, even if you are eligible, it is important to take note that the employer no longer shoulders this health coverage. This means that the ex-employee will have to pay for the portion his/ her ex-employer used to pay for his/her USA health Insurance.

The arguing on the Hill seems ludicrous to me.
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