Basic Cobra coverages

COBRA coverage periods Qualifying event Beneficiary eligible for COBRA Maximum coverage time Termination of job Reduced hours Employee Spouse Dependent child 18 months Employee entitled to Medicare Divorce or legal separation Death of employee Spouse Dependent child 36 months Loss of dependent-child status Dependent child 36 months

Sixty-seven percent of Americans under age 65 who have health insurance receive it through an employer. (2002) 10 things you should know about COBRA

1. Certain "qualifying events" trigger 36 months of COBRA coverage for your dependents.

2. Your former employer can cancel your COBRA coverage if it drops group health insurance coverage completely or goes out of business.

3. If you move outside your COBRA health plan's coverage area, you effectively "lose" your COBRA benefits.

4. You must pay 100 percent of your health insurance premium under COBRA, plus up to a 2 percent administrative fee.

5. COBRA can be used to protect your health insurance rights under the federal HIPAA law.

6. If you are eligible for Social Security disability benefits, you may receive 29 months of COBRA coverage.

7. Many states have adopted their own "mini-COBRA" laws that grant broader rights in determining COBRA eligibility.

8. Under COBRA, you have the same health insurance rights during "open enrollment" as your former employer's active employees.

9. Because COBRA is a federal law, the United States Department of Labor has jurisdiction over COBRA grievances.

10. Even if you enroll in COBRA on the last day that you are eligible, your coverage is retroactive to the date you lost your employer-sponsored plan.

COBRA (Charles D. Spencer and Associates 2002) only about 16% of eligible people -- about 1.7% of the entire surveyed workforce -- opted for COBRA this year, down by more than three percentage points from 2000. Researchers link the election-rate decrease to the recession, even though some larger employers are subsidizing nearly half of the claims costs.

Currently, average active employee costs are $4,947 per year, compared to annual costs of $7,438 annually for those under COBRA. But the survey points out that it is almost impossible to predict COBRA costs in any one year. What is more, administrative COBRA costs do not appear to be related to other COBRA costs, with administrative costs ranging from $36 per covered individual per year to $1,080.

8 problems with COBRA:  from Insure.com