Clearing Up A COBRA Misconception

We have had several people ask us to do an individual health insurance quote to compare to their COBRA rates. When these people were asked why they were going on COBRA (sometimes it is our recommendation to access the government assistance and elect COBRA), we were told that their employer was going out of business and their insurance plan was ending. We would like to take a moment to clarify COBRA. In order to receive COBRA, there has to be an employer’s plan to base the rates. If the employer either goes out of business and has no group insurance any more, or simply decides that insurance is too expensive and ends the group policy, there is NO offer of COBRA to the former or current employees. If the group plan ends, so does the offer of COBRA. Again, without a group to base the rates, there can’t be an offer of COBRA. In our clients situation, we had to move her and most of her fellow employees to individual plans.