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COBRA Insurance Between Jobs

Posted on: September 29th, 2012 by Kristen Marie

A common question we hear from folks considering COBRA is whether or not it is a good idea to use COBRA insurance between jobs. Unfortunately the answer isn’t straight forward and depends on your current health status, age, and how long you think you will be between jobs. For some COBRA will be the best option between jobs and for others they may be able to find a much less expensive alternative. However here is some general advice about insurance options between jobs.

Length of Time Between Jobs

The length of time between jobs is going to be a major factor in determining whether or not you should use COBRA. But first let’s define the length of time as not just when you start the new job, but when your health insurance would start with the new job. Many times you have to be on staff for thirty days before the new insurance will kick in.

For people who will be without insurance for less than 2 months, they likely shouldn’t do anything. Here’s why. COBRA is retroactive back to the day you lost coverage and you have 60 days, or two months to sign up. That means that should you end up needing any type of health care during the 60 days you can sign up before the window is over and get reimbursed for your expenses once you enroll in COBRA. However if you don’t have any medical care needs, which is likely, then you have saved the two months of premiums for COBRA, which could be over $2000 for a family.

For people who will likely be without insurance anywhere between 3 months and 18 months (the length of COBRA coverage), whether or not COBRA is right for you will really depend on your health care needs. For people with preexisting conditions or consistent medical care COBRA may be the best option especially if you can afford it and only will need it for a short time. However if you do not have constant health care needs and don’t use your insurance often then a COBRA insurance alternative may be a better option, especially if there is a long period between jobs. Short term insurance could be a good alternative for a time period of 1 year or less and a private plan could also help save you money if you want more comprehensive care.

Your Health Status

Generally it is recommended that anyone with serious health care needs or preexisting conditions use COBRA to continue their care since they are likely to either be denied from an interim plan and/or be charged outrageous premiums. Additionally not having to change a treatment plan or doctors is very beneficial for someone who uses their health insurance frequently. Alternatively for someone who is generally healthy, young, and doesn’t use their health insurance often, a private plan will likely help them to save a significant amount of money. These plans are similar to COBRA coverage but will charge lower premiums for people who are healthy. Additionally you can consider high deductible plans and short term plans if you do not often use your insurance.

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