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Alabama COBRA Insurance

Alabama COBRA Insurance

Losing health insurance due to job loss is a scary situation for anyone to be in. Luckily for people who lost, quit, or even retired from their jobs there are many options for finding health insurance in Alabama, including federal COBRA insurance.

Essentially, COBRA health insurance is a law that was passed by the federal government in 1986. Contrary to what many believe, it is not an insurance plan. Under this law, employees who fall within certain guidelines have the option to continue to use their group health insurance plan after job loss. This ensures that they are protected medically and also extends to protect their family members.

Health Insurance Options After Job Loss in Alabama

For people experiencing job loss, retirement, or who have quit their job, health insurance is normally a large concern. Going without health insurance can mean huge medical bills for many people, especially if they have a preexisting condition or other medical needs. If you are in this situation and live in Alabama these are the health insurance options you should consider.

  1. Federal COBRA Insurance: The first option that people should consider is COBRA medical insurance. With COBRA insurance you can continue to use the exact same health insurance plan you had with your employer if you meet certain guidelines. The first of these guidelines is having a qualifying health insurance plan with over 20 full time employees. The second is having a qualifying event, which basically means losing, quitting, or retiring from your job without gross misconduct. The final requirement, known as qualifying beneficiaries, refers to who else can use COBRA, which is usually anyone who was on the plan when you were employed. The main benefit of COBRA is that your plan remains the exact same as it was when you were employed. The main drawbacks are that it is very expensive since you have to pay the entire premium and it is a temporary fix that only lasts 18 months in most cases.
  2. Alabama COBRA Insurance: In many states the second option is a state sponsored COBRA plan. Normally these mini COBRA plans extend to people who work at smaller companies that have between 2-19 employees on their health insurance plans and thus don't qualify for federal COBRA. Unfortunately the state of Alabama currently does not offer any state sponsored COBRA insurance option.
  3. Private Health Insurance: The third option that anyone facing job loss should consider is a private health insurance plan. Private health insurance plans are offered through many large companies and offer a wide range of coverage options and monthly premiums. These plans most closely mirror the plans people had when they were employed. A major benefit of private health insurance plans is that for people without major preexisting conditions or constant medical needs they usually are a much less expensive option than COBRA. In fact most people save around 60% when they choose a private plan instead of COBRA. There are many types of plans on the market including individual or family plans that offer full coverage to temporary health insurance plans that are short term and catastrophic plans that only cover major medical needs.
  4. Government/State Health Insurance: The last option that people should consider is government of state sponsored health insurance. These plans usually have income restrictions and will only be an option for people in financial need or near the poverty line in Alabama.

Signing Up for COBRA Insurance in Alabama

If you decide that COBRA is your best option and are living in Alabama, signing up for COBRA is a very easy process. If you qualify for COBRA you will get an election notice from your former employer that includes the cost of your Alabama COBRA plan as well as a list of people eligible to sign up. That form must be completed and returned to the health insurance company within 60 days of receiving it along with the full premium. If you do not return the form within 60 days, the election window will close and you will no longer be eligible for COBRA. If for any reason you do not receive your COBRA election form within 2 weeks of losing your health plan, you should immediately contact the health insurance company of your former employer.

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Alabama Frequently Asked Questions

Does Alabama have its own Mini COBRA plan?

Yes. The state of Alabama created a Mini COBRA insurance plan to extend COBRA benefits to residents who work at companies with less than twenty employees. The eligibility requirements are the same, although you must not qualify for the federal continuation coverage. Additionally the term length and cost are the same for Alabama COBRA

What is the Alabama Health Insurance Plan (AHIP) and who is it for?

AHIP was created by the Alabama state government after the passing of the Health Insurance Portability Accountability Act (HIPAA) in 1986. Under AHP anyone who has used all of his or her coverage from a group plan and are not eligible under Medicare, Medicaid, or any other group insurance plan may enroll. There are two options with AHIP for an indemnity plan or a managed care plan. You can learn more about AHIP by visiting

How much will I pay for Alabama COBRA?

Alabama continuation coverage normally costs 102% of the monthly health insurance premium. This premium includes both what the employee paid while employed and anything the employer paid. Then there is an additional 2% assessment fee for administration costs.

Does Alabama provide COBRA to victims of domestic abuse?

Alabama passed a special law to protect victims of domestic abuse and now allows the health insurance plan of their former spouse during divorce, separation, or lost custody. The coverage period is normally 18 months and is covered under AL Code Sec. 27-55-3. This coverage can also be used even if the covered employee loses their insurance for some reason and is specifically meant to protect people.

What options for health insurance do I have in Alabama if I am unemployed and uninsured?

In addition to COBRA or private insurance, which is too expensive for many, the state has many health care programs that may help residents get through a difficult time. These include the Alabama Breast and Cervical Cancer Treatment Program, Alabama Farmer's Federation/ALFA, ALL Kids Program, Health Coverage Tax Credit Program, Medicaid, and Medicare.