What is the Consolidated Omnibus Reconciliation Act (COBRA)?

Patricia Hafermann • Benefit Specialist

A cobra is a venomous snake which preys on other snakes, birds, and small mammals. COBRA (Consolidated Omnibus Reconciliation Act), on the other hand, is a federal law that may let you keep your employer group health plan coverage for a limited time after your employment ends or you otherwise lose coverage.

When a person elects COBRA coverage, he or she pays the plan premium, which can be up to 102 percent of the cost of the plan for persons similarly situated. The price tag can be shocking to consumers because employers typically pay a large percentage of plan premiums for employee health insurance, but that is not required under COBRA. In addition to losing employer contributions, 2 percent can be added to the premium for administrative costs. Persons can elect COBRA coverage for up to 18 or 36 months.

Consumers should speak with their plan administrator and /or human resources department for specifics about COBRA rights. The purpose of this article is to explore how COBRA coordinates with other insurance options and other options to consider.

COBRA and/or Medicare

You may be able to have both COBRA and Medicare. If you have COBRA when you enroll in Medicare, your COBRA coverage usually ends the date you enroll in Medicare.

There is no special enrollment period for Part B once COBRA coverage ends! You should always contact your SHIP counselor/Elder Benefit Specialist if you are considering declining Part B coverage, as you could be subject to a late enrollment penalty and may have to wait until open enrollment to get coverage.

COBRA or Marketplace

The Marketplace may be a more affordable option to COBRA coverage. Losing jobbased coverage is a special enrollment event in the Marketplace. In the Marketplace, you could be eligible for a tax credit that lowers your monthly premiums and cost-sharing reductions. In addition, you can see what your premiums, deductibles, and out-of-pocket costs will be before you make a decision to enroll.

Eligibility for COBRA continuation coverage will not limit your eligibility for Marketplace coverage or for a tax credit. If you already have COBRA coverage, you can switch to a Marketplace plan within 60 days of losing your job, during open enrollment, or once COBRA ends.

COBRA or Medicaid

There are various health insurance programs provided in Wisconsin under the Medicaid umbrella. If you have limited income and resources, you may be eligible for Medicaid. There are no special enrollment requirements for Medicaid (you may apply at any time) and it will likely be the most affordable coverage option.

If you have any additional questions, you may call Pat Hafermann, Elderly Benefits Specialist with the Aging and Disability Resource Center at (920) 467-4076.

Sources: Published with permission from the Legal Services Team at the Greater Wisconsin

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