COBRA Info

COBRA/State Continuation options are an extension on your former employer’s group plan. These are “regulations”, not plans unto themselves. Individual plans are generally tend to be less expensive than these options, if you can medically qualify for an individual plan. Please click here for more information regarding applying for an individual plan.

If you are offered a COBRA option, all covered family members have INDEPENDENT rights, not just the person who was the employee. This means you can insure one family member via COBRA and the rest of the family may choose to do a less expensive individual/family plan. Please note that individual plans require medical underwriting, so it is important for persons that apply be relatively healthy and free of any major/ongoing health conditions. Individual Health Insurance Plans are not guarantee issue; they require approval from the insurance company! This would be important in the case of a family who is offered COBRA, yet would like to look at individual plans in order to save money. Again, ONE family member (regardless of who it is) can elect COBRA, and the other family members may obtain individual coverage to save the money. Example: John Smith lost his job w/ ABC company, and also in turn lost his health insurance. He, his wife and two children were covered. They were all offered COBRA when he terminated employment. John’s son has Type I diabetes and is not insurable under an individual plan, which would save his family money over the COBRA option. John’s son can take the COBRA (since he is not insurable), and the rest of the family can take an individual plan, which will still save them money.

Employers are now required to contribute 65% of COBRA or Texas State Continuation of Coverage premiums for employees who were involuntarily terminated as of Sept. 1, 2008 through Dec. 31, 2009. This is part of the American Recovery & Reinvestment Act of 2009 and was effective 2/17/2009. EMPLOYERS are required to comply by April 17, 2009. If you were involuntarily terminated from your employment on or after Sept. 1, 2008, you should contact your former employer to learn your options regarding this subsidy. If you have since become eligible for another group health plan, this would terminate your rights to premium subsidy from your former employer. The premium subsidy is offered up to 9 months. Please note that if you were involuntarily terminated due to gross misconduct and were not eligible for COBRA because of this reason, the premium subsidy discussed in this paragraph would not be available to you. Also, the premium subsidy phases out at certain income levels.