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    Default OT - Jessica

    I would wondering if you could tell me exactly how COBRA insurance works. Thanks so much!



    (DH's student withdrew in the middle of the school year. He is thinking about working for himself until something else comes up, but we are looking into insurance options.)

    ~Bonita~

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    Hmmm.....not an expert on Cobra but you have to be in a Cobra eligible situation and the company you work for has be a Cobra providing company (or school). It is company based not insurance based. You are eligible for up to 18 months. The business you work for will give you paperwork on the vendor they use for Cobra administration and they have 30 days from the last day of employment to give it to you and you have 60 days to elect. The new vendor will take over admin of your insurance plan. You will pay them 105% of the premium but the government has subsidies if you qualify.


    Here is the website for more answers:
    COBRA Continuation Coverage

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    Thank you.

    ~Bonita~

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    you're welcome.

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    Here's another thing to consider, if your DH goes the self-employed route. If he purchases an individual health insurance policy, then the premiums are deductible as a business expense, which in turn lowers his self-employment tax. The deduction is only available for the months that he (and you if you're employed) are not covered by or eligible for an employer's group health plan. And it's only available to the extent that the business otherwise makes a profit, meaning you can't take the full deduction if it puts the business into the negative on earnings for the year.

    Publication 535 (2012), Business Expenses
    Form 1040 Line 31 Self-Employment Health Insurance
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    Thanks for the tip. COBRA insurance I think will be fairly expensive, so I am not sure we will go that route or not. I think he is going to try to stay put for the remained of the school year, then do something different for next year.

    ~Bonita~

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    Cobra is expensive but cheaper than a $13,000 surgery
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    Quote Originally Posted by mommytoMR.FACE View Post
    Cobra is expensive but cheaper than a $13,000 surgery
    I did not mean that we would not have insurance. Other options would be that he kept his current job until a job with insurance came up, or we got individual insurance not through an employer.

    ~Bonita~

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    Quote Originally Posted by Jessica80 View Post
    Hmmm.....not an expert on Cobra but you have to be in a Cobra eligible situation and the company you work for has be a Cobra providing company (or school). It is company based not insurance based. You are eligible for up to 18 months. The business you work for will give you paperwork on the vendor they use for Cobra administration and they have 30 days from the last day of employment to give it to you and you have 60 days to elect. The new vendor will take over admin of your insurance plan. You will pay them 105% of the premium but the government has subsidies if you qualify.


    Here is the website for more answers:
    COBRA Continuation Coverage
    The COBRA subsidies ended in 2011 and they were only for people who were involuntarily terminated (so if you quit you weren't eligible). COBRA is very expensive and unless one of you has major health issues, he can more than likely find similar coverage at a lesser cost in the open market. Our Family COBRA premium is $1,684 a month for medical and dental, and that's actually less than most I see.
    Last edited by SID081108; 03-27-2013 at 06:04 PM.
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    Thank you for coming to correct the information. I do not work as a Cobra vendor so I didn't realize the subsidy had ended.

    A direct pay plan may work in your favor if local rules allow you to elect an individual plan if you are Cobra eligible.

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