Whole vs Term

In a recent report made by the Bureau of Labor Statistics of the U.S. Department of Labor, it was apparent that employment continued to decrease in February (-651,000), and the unemployment rate climb up from 7.6 to 8.1 percent. So technically, the payroll employment has declined by 2.6 million in the past 4 months. Looking at these figures, it is very obvious that household finances cannot totally rely on the money people take home from their jobs and of course cannot acquire group health insurance plan.

To secure a better future for their families, most people now consider starting their own business. If you’re one of them, make sure that even with this small venture, you are financially protected from any mishaps, especially regarding that of your health. Familiarize your self with COBRA as it will definitely aid you in this endeavor. Here are some things you need to know:

1. What is COBRA continuation health coverage? Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

2. What does COBRA do? COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves.

3. Who is entitled to benefits under COBRA? There are three elements to qualifying for COBRA benefits. COBRA establishes specific criteria for plans, qualified beneficiaries, and qualifying events:

* Qualifying Events for Employees:

Voluntary or involuntary termination of employment for reasons other than gross misconduct

Reduction in the number of hours of employment

* Qualifying Events for Spouses:

Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct

Reduction in the hours worked by the covered employee

Covered employee’s becoming entitled to Medicare

Divorce or legal separation of the covered employee

Death of the covered employee

* Qualifying Events for Dependent Children:

Loss of dependent child status under the plan rules

Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct

Reduction in the hours worked by the covered employee

Covered employee’s becoming entitled to Medicare

Divorce or legal separation of the covered employee

Death of the covered employee

4. How does a person become eligible for COBRA continuation coverage? To be eligible for COBRA coverage, you must have been enrolled in your employer’s health plan when you worked and the health plan must continue to be in effect for active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would, except for the COBRA continuation coverage, cause an individual to lose his or her health care coverage.