My husband left his corporate job 19 months ago, took a consulting contract as part of our organization, Xceptional HR and with it left our employee benefits. Our family took advantage of COBRA known as the Consolidated Omnibus Reconciliation Act. When employees and their families leave their places of employment or experience a benefit status changes such as death, divorce, and job transition, they have the option to continue under their previous employers group health insurance coverage for an extended period of time which in my case was 18 months.
Under COBRA, our family had to pay 102% of the total cost of health insurance which includes the expense our family was responsible for as an employee plus what the company covers plus a two percent administrative fee. The total cost was approximately $850 for our family of 3.
In my experience, employees and former employees are often surprised at how expensive benefits under COBRA actually can be. I, however was not. COBRA provides employees and former employees the opportunity to continue their health insurance and their health insurance alone. And because of my experience as a HR practitioner and someone who has oversaw benefit plans in the past, I knew exactly what to expect. Or so I thought.
What I was not prepared for was the group health insurance I would have to negotiate for myself and my husband as employees of our organization. The process for our company involved a sea of paperwork, legal documents, and financial statements and reports before even being approved. One of the benefits of being a small organization with two full-time employees, is that in the state of Oklahoma we are eligible to receive group health care insurance. So I am thankful.
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Group health care insurance is a company sponsored health insurance and benefit plan. Employers and employees are both eligible for special tax incentives and benefits as part of a group health insurance plan. This differs from individual health insurance where the individual or individuals is responsible for the cost and expense of the health insurance plan. Insurance companies often times require individuals to undergo a medical examination prior to their plans being approved and often times exceptions or ryders are put in place making the persons receiving the coverage responsible for medical expenses based on their previous medical history.
And for the many Americans who look to individual health insurance plans, they can be extremely expensive. If I was to have selected individual health insurance, my family would be responsible for a $1200 a month charge. Maternity benefits would not be included and because of the emergency C-section I had previously when my daughter was born, the insurance company would not cover any these expenses for future children. But for an additional fee they would provide maternity benefits leading up to the actual childbirth. My family and I, however, would be saddled with the $20,000 cost of the cesarian birth.
I’m here to tell you that there’s life after COBRA. This is my family’s second month on our new group health care plan. It’s important to get the facts and do the research long before you launch a new business or experience a benefit status change. Doing so makes the process easier to prepare for and understand. Because situations like these can be scary so its essential to arm yourself with the information to make an informed decision. Consider working with a local insurance agent, reading your company’s health insurance plan, learning about COBRA costs, or talking with your company’s human resource professional.
Photo Credit Bash Events Studio.