Cobra Always Sounds Like A Good Idea

By Author: Norris Rios
Total Articles: 568
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Not that we want to come over all pessimistic, but this recession has been going on for a long time now and there's no real sign it's going to come to an end anytime soon. Looking around, the property market is still in deep trouble. Foreclosures were slowed by the robo-signing problem, but banks are picking up the pace again. The unemployment rate is stuck in the 9.5% area nationally. Locally, of course, it can be far worse, particularly among the young and the older workers. So what do you do if the worst happens and your job is suddenly on the line? Well, the first part of the answer is you negotiate to stay in work. Even though you may have to work longer hours or take a cut, this is better than no money coming in. Other than that? Well, it all comes down to how careful you've been with your money.

Looking back, some of the moralists have drawn on nature for models of how best to live. Some animals are really industrious during the summer. This is the time of plenty but they run around like there's no tomorrow, collecting food and burying it or putting it somewhere safe for the hard times during the winter. Others ...
... sit around getting fat and, when the food runs out, they starve and die. Well, it's the same with us humans. If you not only stay within your budgets, but save while the boom years give you plenty, you're well set-up when hardship comes. But if you borrowed heavily and never paid down your debts, you're in trouble when the pay checks stop.

The big question should you be given a pink slip is what happens to your health coverage. During all these happy years of security, there's been no need to worry about the world of private insurance. Now, suddenly, you're negotiating the final package of severance pay. If you're lucky, your employer may offer some help in finding somewhere new to work and, while all this is going on, you need to research the Consolidated Omnibus Budget Reconciliation Act of 1985 (better known as COBRA).

On paper, so long as your last employer had 20 or more employees, you and your family have the right to continue basic medical and dental coverage for between 18 and 36 months. This assumes, of course, that you are not being terminated for some major infraction. To start you off on your studies, you employer should have sent you a notice about your COBRA rights. Essentially, you have 60 days to agree to continue coverage out of your own pocket. Now you see why having some savings is a good idea. But, if you do not have enough cash put by to meet the monthly installments, your coverage is lost and you are pitched out into the world of private health insurance plans. That's why COBRA sounds like a good idea, but it fails when those out of work do not have the savings to make the payments. It's all a case of health insurance being given to them that have the cash to pay for it.