The Consolidated Omnibus Budget Reconciliation Act
(COBRA), a law created in 1986, gives workers (and
members of their family) who lose their health
insurance benefits the right continue their group
health insurance for a limited period of time under
circumstances such as voluntary or involuntary job
loss, reduction in hours, transition between jobs,
divorce, adoption and death.
Generally, the employee pays up to 102% of the premium
cost for the same policy; this is still usually less
expensive than buying an individual insurance policy.
There are three basic aspects for qualifying for
COBRA: the qualifying event, the insurance plan
coverage and the qualified person.
Each aspect is taken into consideration when applying
for COBRA and you must elect to either apply for COBRA
or waive your rights to COBRA within 14 days after a
You must also should have been in the group insurance plan
during your employment to be eligible. Although there
are exceptions, generally you may continue to pay your
own premiums to keep COBRA coverage intact for up to
Companies who have fewer than 20 employees, State or
Federal employers or employee organizations may not
offer COBRA coverage.
Check with your health insurance administrator to see
if you may qualify. You may also have this information
readily available in your group health insurance
policy or in your company handbook.
Although it may be expensive, the cost of being able to keep your group insurance coverage rate may be well
Medicare is a governmental program which provides
medical insurance coverage for retired persons over
age 65 or for others who meet certain medical
conditions, such as having a disability.
Medicare was signed into legislation in 1965 as an
amendment to the Social Security program and is
administered by the Center for Medicare and Medicaid
Services (CMS) under the Department of Human Services.
Medicare provides medical insurance coverage for over
43 million Americans, many of whom would have no
medical insurance. While not perfect, the Medicare
program offers these millions of people relatively low
cost basic insurance, but not much in the way of
preventative care. For instance, Medicare does not pay
for an annual physical, vision care or dental care.
Medicare is paid for through payroll tax deductions
(FICA) equal to 2.9% of wages; the employee pays half
and the employer pays half.
There are four “parts” to Medicare:
- Part A is hospital coverage
- Part B is medical insurance
- Part C is supplemental coverage
- Part D is prescription insurance
Parts C and D are at an added cost and are
not required. Neither Part A nor B pays 100% of
medical costs; there is usually a premium, co-pay and
a deductible. Some low-income people quality for
Medicaid, which assists in paying part of or all of
the out-of-pocket costs.
Because more people are retiring and become eligible
for Medicare at a faster rate than people are paying
into the system, it has been predicted that the system
will run out of money by 2018. Health care costs have
risen dramatically, which adds to the financial woes
of Medicare and the system has bee plagued by fraud
over the years.
No one seems to have a viable solution to save this
system that saves many people throughout the country.