Bridging The Gap In Healthcare Costs

If you're between jobs, COBRA can provide affordablemedical coverage for you and your family. Here'swhat you former employer won't tell you.

her company had to offer. After leaving her post as a job training expert at a nonprofit research center, in Washington, D.C., Weddington was notified that her COBRA benefits would run to $300 a month. Single and in her 20s, she discovered that individual policies were even more expensive, running in the $350-$400 range. “I couldn’t do better than what I had, so I opted for COBRA,” she says. “If I ever have to do it all again, I’ll definitely look at COBRA first.”

Still, you can expect a steep monthly health bill. On average, monthly premiums nationwide are $309 for a family of four, according to a survey conducted by the Chicago-based publishing firm, Charles D. Spenser & Associates. The survey found that only 19% of those people eligible for COBRA coverage actually opted for it last year.

“Most people go into sticker shock when they realize just how much they’re going to have to foot in health costs,” says Bob Parr, a senior manager of the insurance seller American Medical Security. He notes the bill can often mount to as much as $600-$800 a month for family coverage, depending on the area where you live.

If you find COBRA costs too steep, there are alternatives. “Many professional organizations, unions, fraternities, and sororities offer health insurance plans for individuals and family members,” notes Richard Coorsh, a spokesman for the Health Insurance Association of America.

Nonetheless, COBRA is useful in that it helps you maintain coverage as you sort out your future during those nonworking days or months. In fact, it allows you to remain under your company’s health care package for 18 months after you leave your job, extending 36 months of coverage to your dependents.

What the law doesn’t guarantee is a bargain. But given the excessive costs, it may be worth your while to examine viable alternatives. Better yet, with a little forethought, you can even tailor COBRA coverage to be less of a financial burden.

To help you better weigh your health coverage options, here’s the lowdown on COBRA, and what your employer probably won’t tell you.

As a guarantee of continued coverage, COBRA has its benefits, particularly if you or your spouse is pregnant or suffers from the kind of pre-existing condition that scares new insurers off. COBRA, also, will save you a bundle if a member of your family is undergoing special dental treatments. For example, if your kids are sporting braces, a $20- $30 monthly premium under COBRA certainly beats a $1,000 expense that probably won’t be covered in a cheaper plan.

So how does COBRA operate? And what should you expect when you cut ties with your current employer and wish to maintain insurance coverage? Generally, in a company of 20 or more employees you’re eligible for COBRA benefits once you undergo what your human resources counselor calls “a qualifying event.” Quitting your job or being fired or laid off, having your hours cut, or losing your insurance when your spouse, who carried coverage for the

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