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When does my health insurance expire?

To sum it up...
  • COBRA is a government program aimed at maintaining health insurance coverage
  • It applies to people who have been laid off or quit
  • It lasts from 18-36 months, depending on your situation

Health Insurance Expiration Dates

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As previously mentioned, the amount of time that an employees health benefits stay active after leaving the company is a matter of the organization’s policies. However, the date of the employee’s last day also plays a large part in the expiration date of the health benefits.

Most companies don’t cancel health insurance benefits until the end of the month. This is because the policy has likely already been paid through that month.

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Clarifying the Time Frame

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Employees planning to quit should not assume that this is the case. They should consult the paperwork regarding their benefits that they were given at the beginning of their employment. If this fails, the employee should speak to their employer to clarify the situation.

It is important to note that some organizations do cease health insurance benefits as soon as the employee quits. It is also important to keep in mind that an employee who quits near the end of the month may see their health insurance canceled after only a few days.

Possible COBRA Coverage

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If you are looking into what your health insurance situation will be like when you quit your job, you’ve almost certainly heard about the COBRA laws. If you can get COBRA coverage (which not everybody is eligible for), you may not need to compare health insurance quotes online for some time.

COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act, was enacted for Americans who quit their jobs but cannot afford a lapse in health insurance.

The United States Department of Labor has said that COBRA is designed to allow employees who leave their jobs to keep the same insurance, despite the fact that their employer is no longer subsidizing their policies.

Health Insurance Employer Subsidization

The health insurance offered by employers is either free or heavily discounted by the employer. When the employee leaves their job, the employer eventually stops subsidizing the insurance.

It is important to keep in mind that health insurance without employer subsidization would be much more expensive. For example, people who have to purchase their own policies pay much higher premiums than those who get health insurance through their jobs.

What should somebody not covered by COBRA do?

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Not all people leaving their jobs can find coverage under the COBRA program. There are several options for those not meeting the qualifications for COBRA.

Firstly, it’s a good idea for people not covered by COBRA health insurance to start comparing health insurance quotes online right away. This will allow them to find the plan that offers the best combination of coverage and price.

People who can’t get coverage through COBRA should also see if they can get covered through their spouse’s health insurance. In most cases, this is possible. Joining a spouse’s health insurance after leaving a job is usually considered to be a “qualified status change” which means that enrollment is possible outside of the open enrollment period.

More information on COBRA

Many people who are worrying about their health insurance expiring are eligible for COBRA. However, there is a lot of confusion about who us eligible and how long they are eligible for. Thankfully, the federal government has posted an extensive amount of information about COBRA online for concerned parties.

COBRA is a fairly complicated piece of legislation, and it is vital that people worried about their health insurance ending take the time to understand it fully.

The History of COBRA

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COBRA was originally passed by Congress in 1985, and enacted in 1986. The most well-known part of the legislation (and the most relevant part for the purposes of this article) regards health insurance, but other parts of the legislation concern many different tax issues.

In its original form, it hits the employer with a tax penalty if they don’t continue to subsidize coverage for employees that have been laid off or quit. The law doesn’t apply to those who have been fired from their jobs. There is also an exemption for small businesses.

For the purposes of the COBRA legislation, a small business is considered to have fewer than 20 employees.

How long do COBRA benefits last?

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The length of COBRA benefits is often described as a year and a half, and this is partially true. Most people covered under the provisions of COBRA have their health insurance policies extended by 18 months. However, some people see their coverage extended for longer.

If the Social Security Administration decides that the individual is disabled, their coverage is extended for 29 months. If the spouse of an employee covered under COBRA obtains a divorce, they are covered under the provisions of COBRA for 36 months.

Similarly, if a former employee covered under COBRA dies, their widow or widower is covered for 36 months.

When COBRA Doesn’t Apply

There are several situations in which COBRA does not apply. For example, if the employer terminates their group health insurance plan entirely, the former employee cannot be covered under COBRA. This is also the case if the former employer goes out of business.

States and Mini-COBRA Laws

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In some states, people not covered under the conditions in the preceding paragraph are covered by the state government’s version of COBRA.

This is not the case in all of the states, and the states that do have mini-COBRA laws legislate and enforce these laws quite differently than the federal government.

It’s best for people to look up the laws of the state they reside in, and ascertain whether or not there are mini-COBRA laws that may benefit them.

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References:
  1. http://www.dol.gov/ebsa/pdf/cobraemployee.pdf
  2. http://www.cms.hhs.gov/COBRAContinuationofCov/12_CoordinationwithOtherBenefits.asp
  3. http://www.npr.org/templates/story/story.php?storyId=99973267
  4. http://www.dol.gov/recovery/
  5. http://www.dol.gov/ebsa/faqs/faq-cobra-premiumreductionEE.html
  6. http://www.usatoday.com/money/perfi/columnist/block/2010-01-04-cobra-extension-health-insurance_N.htm
  7. http://www.govtrack.us/congress/bill.xpd?bill=h111-4691
  8. http://www.sfgate.com/cgi-bin/blogs/pender/detail?entry_id=58343&tsp=1
  9. http://www.healthcare.gov/glossary/s/state-continuation.html

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