The consolidated Omnibus Budget and Reconciliation Act of 1985 (COBRA) is federal legislation that is important to people going through divorce. COBRA requires that certain group health insurance plans must provide continued health coverage beyond the point coverage would otherwise be terminated.
This means certain employees, former employees, retirees, spouses, ex – spouses and dependent children have the ability to carry health insurance at a group rate for a certain period of time. This is important information to have during divorce settlement negotiations.
Who qualifies for COBRA?- An individual covered under a group health plan either as a covered employee, spouse of a covered employee, ex – spouse of a covered employee and depended children of a covered employee.
- Employees who retired on or before the date of substantial elimination of the group health care plan.
- The spouses, surviving spouses and dependent children of retired employees.
COBRA allows for up to 18 months, 29 months or 36 months of continuation of coverage depending upon the qualified beneficiary’s status and the nature of the qualifying event. If you obtain COBRA coverage due to divorce, the courts will take into consideration your ability to acquire your own insurance. If you have been a stay at home, mom in a long - term marriage your COBRA benefits will last longer. If you have worked outside the home and are able to afford coverage after a period of rehabilitation your COBRA benefits will be shorter in duration.
What are the intentions behind COBRA?COBRA is a short - term bridge to other health insurance. It is there to help during a time of transition. It is not a permanent solution to the problem of health care coverage. You should put effort into finding your own private health insurance as soon as you can.
Here is an example of how people get into trouble when they intend to use COBRA for the duration of their term. If you have COBRA coverage of 18 months and after 16 months suffer a heart attack or sustain a serious injury, you are then faced with finding new insurance within a few months of a serious illness. It will be nearly impossible to find health insurance if you have a pre – existing health issue.
If you need the COBRA coverage, then take advantage of it but don’t become dependent on it. You should set out to find other health insurance coverage that is permanent as soon as possible. Don’t wait 18, 29 or 36 months and then start looking.
