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Tuesday, April 22, 2014

Don't Elect COBRA! Buy Exchange Coverage

One of the little-talked-about benefits of the Affordable Care Act's Insurance Marketplace is that people who lose their health coverage during the year become eligible to sign-up.  The same COBRA qualifying events that make you eligible to elect COBRA also make you eligible for mid-year sign ups on state or federal Exchanges.  Employers can charge you 102% of the full premium for your existing coverage, and generally employees pay about 1/3 to 1/2 of the full premium.  COBRA premiums, then, are sure to be anywhere from double to triple what you normally pay.

Exchange coverage will be 100% of the full premium.  The coverage pool is also larger than most employers.  Chances are your premiums will be the same or less than COBRA coverage.  However depending upon your income you could be eligible for a subsidy which could make the coverage less expensive.  Another advantage is that if you did not elect a certain coverage as an employee you cannot elect it under COBRA.  Exchange coverage, as I understand it, has no such restrictions.

Before electing COBRA check out your state or federal exchange.  It will almost certainly cost you the same or less and provide you more flexibility in what you choose to elect.

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