How to Pay for COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows people who have recently separated from their employer or reduced their hours below the insurance-required threshold to continue to receive insurance benefits.



COBRA provides continued benefits for the employees' spouse and other dependents after the employee leaves the job or reduces hours.



COBRA covers spouses after separation or divorce, eligibility of the employee in medicare or the death of the employee. Dependant children can receive COBRA coverage if the employee can no longer claim them as a dependant because of age or loss of student status.



COBRA requires employers with 20 or more employees to offer continuous coverage for 18 to 36 months, depending on the "qualifying event", or reason for eligibility. If an employee is fired for gross misconduct, the definition of which varies by employer, he and his family are not eligible for COBRA.



COBRA participants pay the full cost of the premium at group insurance rates and a two percent processing fee. It is generally less expensive than the cost of comparable plans at individual rates.

Instructions

• 1

  Receive your first bill approximately 30 days after the insurance company or COBRA administrator approves your COBRA application. The bill will include retroactive payments from the date of the qualifying event and the current month's premium.

• 2

  Write a check or get a money order for the full amount of the bill. Write your credit card information on the bill if the insurer accepts payment by credit card. Pay the entire amount by the due date or, if the insurer provides one, by the end of the grace period, or the company will cancel your insurance for non-payment.

• 3

  Mail the invoice and the check or money order to the insurance company, the Human Resources department of your former employer or a third-party insurance administrator. The address to which you are supposed to send payment is printed on the bill.