Why COBRA Health Insurance is Only a Short-term Health Insurance Policy
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law enacted in 1985 which ensures that some employees can retain their health care coverage if they lose employment. Not a health care plan in and of itself, COBRA is rather an opportunity for employees to keep the same insurance they had until they, presumably, enter another position where they will once again be covered.
How Do You Qualify?
The first, and perhaps most common way to qualify for COBRA coverage is to become unemployed. If a worker is an employee of a business which has employs more than twenty workers and offers them health benefits, and loses their job, then that worker generally qualifies for COBRA, as long as they did not lose their position as a result of gross misconduct. This means losing one's job as a result of strikes, lock-outs, and involuntary or voluntary reduction of hours, or simply from quitting, are usually all qualified events.
It is not only workers who qualify, however. Spouses and dependents of workers who qualify for COBRA, qualify in turn. In addition, if a worker dies or becomes eligible for Medicare, and causes their dependents to lose their coverage, these dependents may claim COBRA until they find another source of coverage. This also applies to spouses who lose benefits due to a divorce - since they will no longer be covered on the worker’s insurance plans, they may qualify for COBRA until they find a plan of their own.
Children who lose their health insurance due to reaching an age at which their guardian’s plan no longer covers them are also eligible for COBRA.