Question

COBRA allows an employee to stay on his or her former employers health insurance plan after leaving a job. Differentiate between the advantages and disadvantages of Cobra from an employees perpective

Answer 1

Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law passed in 1985 which allows employees to get the benefits of his or her former employer’s health insurance plan after leaving a job.

The advantages of Cobra:

• The greatest advantage of COBRA is that it helps the employees and their dependents after leaving or termination of their jobs.
• This cover is also available to the employees working part time OR if their jobs hours get reduced.
• The beneficiary should be covered under employer’s group health plan on the day before the situation that causes loss of coverage

The disadvantages of Cobra-

• If the employee is not covered under employer’s group health plan on the day before the situation that causes loss of coverage; he or she will not get the benefits of COBRA
• Employees covered under Medicare will not get the COBRA benefits
• COBRA benefits are only for limited time period; from 18 moths to 36 months