What Is COBRA Insurance? Understanding the Consolidated Omnibus Budget Reconciliation Act

So you want to understand COBRA insurance? It's important to get a complete and thorough understanding of the COBRA law, also know as the Consolidated Omnibus Budget Reconciliation Act, as well as understand who is eligible, how to sign up, and when you should consider alternatives. Knowing this critical information will help you make a smart decision for your household

First Up..Understand the COBRA Insurance Law

In 1986, Congress passed landmark legislation known as the Consolidated Budget Reconciliation Act, or COBRA. This piece of legislation, for the first time ever, protected people from suddenly losing their health insurance if they lost, quit, or retired from their job. In it's essence, COBRA health insurance laws allow an employee and anyone else who was covered on the employee's health insurance plan, to continue their coverage on that employer plan. That means that an employee and their family could choose to keep the exact same coverage (doctors, hospitals, prescriptions, everything). So what's the catch? Well, there are two main downsides to COBRA medical insurance coverage. First, under the law, the employee is responsible for paying the full premium and a 2% administration fee. Since most employers pay up to 80% of health insurance costs, this is a pretty substantial amount, sometimes upwards of $1000 monthly for families. Moreover, COBRA insurance only lasts eighteen months for most people. That means that eventually you will need to seek out other insurance either through a private company or through a new employer. This can be difficult, especially if you have a preexisting condition.

So How Do You Qualify?

Luckily, it actually isn't too hard to qualify and most people find they are eligible for COBRA health insurance. The law outlines three main criteria for signing up for COBRA continuation insurance - qualifying plan (the plan of your employer), qualifying event (why you lost coverage), qualifying beneficiaries (who is covered), and although they sound complicated, it actually is pretty simple.

• Qualifying Plan: Your previous employer's health insurance plan had at least 20 full time employees (or their part time equivalents
• Qualifying Event: You were terminated, laid off, lost, quit, or retired from your job without any gross misconduct (i.e. stealing, sexual harassment, or other serious offenses)
• Qualifying Beneficiaries: Anyone who was covered under your previous plan, is almost always covered with COBRA - spouses, children, and other dependents. You can also add new people just as you could under your plan - remember the plan is identical!

What about COBRA Insurance Enrollment?

At this point, hopefully you understand what is COBRA insurance and now you may be thinking - "Great, how do I enroll?" and lucky for us, it is very simple. Within 14 days of the last day of your health insurance coverage, your employer is required by law to provide you with a COBRA election form. Simply fill out that form with the names of everyone you would like COBRA continuation insurance for and send that in with a payment for the full premium. It must be sent within 60 days of you receiving the notification.

Should I Consider COBRA Insurance Alternatives?

Pretty much every insurance and financial expert thinks it is important to consider alternatives to COBRA. This is mainly for two reasons. First COBRA is EXPENSIVE. There likely are many other private insurance plans that will offer a much better deal for similar coverage. Secondly, there may be a better plan out there for you. However, this always depends on your health condition, lifestyle, budget, and needs, so we recommend always at least getting quotes for other insurance companies, but making the decision that best suits your needs.

Need more information about COBRA insurance, state level COBRA insurance, or still have questions? Learn from insurance experts at http://www.whatiscobrainsurance.org with a simple, easy to understand information, that will help you make smart decisions about your insurance needs.

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Should You Get Nursing Home Insurance at a Young Age?

Thinking that you are too young, can mean you avoid getting the protection provided by nursing home insurance policies. Some may think that it is only for retirement-age people and that less mature adults shouldn't worry about buying this important coverage.

There are several advantages to purchasing long term care insurance at an early age. You may need to be in a long term care facility long before you reach normal retirement age. You may develop a health condition later in life that will keep you from buying a nursing home insurance policy in the future. You be able to lock in a lower monthly premium if you purchase a long term care policy at a younger age.

Planning ahead and buying a long term care policy can mean that not only are you prepared for your golden years, you are better protected today. Skilled care in a custodial facility is needed by both the old and the young who are unable to live in at home due to a sickness or injury that causes disability.

Although it is true that one is more likely to need nursing home insurance (long term care insurance) the older one gets. Not everyone in a nursing home is elderly. Eighty-eight percent of the people in a nursing home are over age 65. This means that twelve percent of nursing home residents are not of retirement age.

Other types of policies will not cover a nursing home stay or won't cover it well. Health insurance and disability insurance plans can provide some coverage, but the coverage can be quite limited.

A medical insurance policy may cover you well in the hospital and the doctor's office. However your policy probably only covers the expenses of the first one hundred days in a skilled care nursing home. Most residents are in custodial care facilities or intermediate care facilities.

A disability income policy may pay you a percentage of your lost wages when you are disabled. Even if this does provide you with enough income to cover the cost of your care, you will have less income left over to cover your mortgage or any other expenses that you may have.

Long term care insurance requires applicants to be medically underwritten. This means that if you have a medical condition you may not qualify or you may be charged a higher insurance premium. This means that if you are healthy today, you may qualify for a low cost long term care insurance policy. However, since you cannot guarantee that you will just as healthy a year from now procrastination can mean that you will be unable to own this important protection.

The prices for nursing home insurance policies tend to be based on the age you purchased your policy. This means that you can pay the price only forty-year-old applicants qualify for when you are in your sixties and seventies. This can mean a huge cost savings when your income is more limited.

If you add an inflation rider to your coverage, you may only not even need to supplement your coverage as you get older. An inflation rider is recommended for any long term care insurance purchase.

Buying long-term care insurance at as as a younger man or woman has significant advantages. You get insurance protection right away. You are more likely to medically qualify for a policy. You will probably be able to lock in much lower insurance premium than you would if you waited, since rates go up as you age.

For more regarding what is the best age to buy LTC insurance you can visit the author, Alston J. Balkcom's website. You can listen to his insurance podcasts.

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