Waiving Your COBRA Continuation Coverage

When you leave a benefits-providing job, you may be eligible for COBRA continuation coverage to extend your medical benefits for a limited period of time. This allows you to continue with your current health care provider despite the fact you are no longer on your company's plan. The COBRA service is provided by the government, and it is easily attained by filling out a few forms. Before you jump into signing up, though, you should know it is not always the best option.

The Cost of COBRA Continuation

The cost of your health care when employed by a benefits-providing company is partially subsidized by that company. In fact, the subsidy may be as much as 50 percent. When you shift to COBRA, you will be paying your premium without a subsidy. The cost can be enormous. If you are laid off from a job involuntarily, you may be eligible for a large reduction in your COBRA premium. This premium reduction can be enough to make the offer enticing. On the whole, however, continuing the benefits that can be provided by a large, corporate health plan out of your own pocket is costly.

The Cost of Alternative Options

You may want to pursue an alternative health care option. For example, you may decide you would like catastrophe coverage only while in between jobs. This is a common decision. It allows you to receive assistance if you are in a major accident or suffer a severe illness. When it comes time to go to the doctor, though, you will pay out of pocket. If you are a healthy individual, the cost of paying out of pocket for these minor services is typically far lower than electing full coverage with a health plan. Consider nonprofit companies, such as Kaiser Permanente, or risk pools in your state to compare costs.

Using COBRA Continuation Coverage

If you do elect COBRA continuation, the main benefit is your coverage simply extends from where you left off. This means you will be able to use the same health care cards, dental insurance cards and prescription services. You can use the same primary care physician and the same specialists. Your day-to-day health services do not change. You are simply writing a bigger check and delivering it to someone new. The ease of this transition is one major reason individuals elect the COBRA option.

Using Alternative Options

Alternative options require a bit more adjustment. You will have to research plans, and you may have a gap in coverage in the meantime. Aside from time spent in research, you may find it confusing selecting the right plan. Most individuals are not experts in the health insurance arena, so they may need to ask questions of a broker, who will charge a fee, regarding the best choices. If you are responsible to parties other than yourself, such as a family, you may find this option much more complicated and uncertain than you would like. However, most independent individuals will be able to locate a new plan without too much trouble and receive new coverage cards within a few weeks.