COBRA Election is a Shortcut to Medical Bankruptcy
If you are changing jobs, please stop and think before electing COBRA.
Nashville, TN (PRWEB) March 18, 2007
Employees leaving an employer are often times presented with an option to continue their health benefits for 18 months on the average. The amount of premium for this extension is the billed amount to the employer plus 2% for the trouble or bother of having to deal with an ex-employee. Why does an employer do this?...It is federal law that if the employer has 20 or more employees in the group, the employer HAS to offer this extension.
Now, why would an employee accept this temporary extension? If the employee was in tune with the pitfalls of this temporary extension to medical bankruptcy, the employee would decline the extension and get their OWN personal insurance policy through a reputable insurance company. Folks, you do not work there any more first of all. Next, if you are in an accident or have a major illness while on the COBRA extension, you had better hope you are well before the extension expires. Why, because you may very well be Uninsurable now. And guess what, when COBRA runs out, you are now on your own. But, if you had purchased your own policy when you parted ways with your old employer, you now have control of your own medical benefits with no expiration date.
Who would want the COBRA extension? A person that was uninsurable when they terminated employment would have to accept this option...and hope they are able to get into another job providing benefits before the extension expires. Otherwise, they will join the ranks of people trying to get into state run pools of uninsurables. Good Luck. Or, one other option is the guarantee issue plans that are mandated through the HIPPA legislation. These guarantee issue plans can be a life saver but they do not come cheaply.
For more information on these and other plans, consult your benefits advisor. A good agent will be needed.
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