The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1986 by congress, and affords former employees, an employee’s family, and retirees to continue their group health coverage after their employment ceases. For the most part, you’re able to continue your group coverage for up to 18 months after your employment is terminated. Although this sounds nice, the reality is opting for COBRA coverage really hurts the pocketbook. The reason why COBRA costs so much is because the ex-employee is responsible for paying the entire premium of what it cost to be insured under the group plan.

So what has Obama done to help people afford COBRA coverage?
In February, President Obama signed the American Recovery and Reinvestment Act. Included in this bill is a COBRA stimulus plan. Essentially, the COBRA stimulus plan helps to alleviate the expense of coverage by subsidizing its cost 65% for a period of nine months. It also affords people the opportunity to re-enroll in their COBRA coverage if they had previously declined it because it was too expensive to afford.

How do I know if I am eligible for Obama’s Stimulus Plan?
In order for you to become eligible for Obama’s COBRA stimulus, your termination must have been involuntary, and occurred between Sept. 1st 2008 and Dec. 31st 2009. In addition, your income will also determine whether or not you qualify. For single people, your income can’t exceed $125,000 and $250,000 for couples. If you want to know whether you can re-enroll, I would suggest that you speak with your former employer to see if that option is available.

Why would you opt not to take the COBRA stimulus?
Individual policies still can be less expensive than the subsidized COBRA coverage. Furthermore, COBRA plans are susceptible to rate increases while you’re covered; whereas the rate of individual policy can be locked in for at least a year. Finally, heaven forbid you acquire a pre-existing condition while on COBRA and are unable to find a job; you may become ineligible for individual coverage and be facing financial ruin when your COBRA runs out. To figure out the best option for you, speak with an Advisor at MyInsuranceExpert.com about COBRA plans.