It’s not a snake, but its high cost can make it feel like one!
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act.
It is a law that was passed by Congress in 1986. COBRA provides you the option to continue your current healthcare plan (i.e. your former employer’s group health insurance) at the group rate that your former employer pays. COBRA enables you to continue to go to the same doctors, receive the same prescriptions, and be treated at the same hospitals you’re accustomed to.
The most important feature of COBRA is that if you have a pre-existing medical condition (e.g. diabetes) you do not have to worry about qualifying for a new plan.
In addition, because of the tremendous variety in health coverage options, COBRA provides the ease of having access to plan that you are already familiar with, saving you the time of evaluating and enrolling in a new health insurance plan.
According to various surveys, anywhere between 25% and 50% of people who are eligible for COBRA sign up under the plan. COBRA coverage generally lasts for 18 months, with extensions available in certain instances.
Note: You will also be eligible for COBRA if you have had your work hours reduced to the point where your employer no longer contributes to your health insurance.