Can you afford to keep your health insurance if you lose your job?
A report by Families USA shows how unaffordable COBRA coverage is. COBRA is the federal law that allows people who were working for employers that have 20 or more employees to keep their employer-sponsored group coverage after they leave their job by paying the full premium themselves (plus an administrative charge).
The report found that while unemployment insurance (UI) benefits and the cost of COBRA coverage vary substantially from state to state, UI benefits are generally inadeaquate to pay for COBRA premiums. According to the report:
- On average nationally, UI monthly benefits are $1,278 while COBRA monthly premiums for family coverage are $1,069.
- In 40 states plus D.C., COBRA family coverage premiums, on average, consume more than three-fourths of average UI benefits.
- In nine of those states the average COBRA premiums equal or exceed average UI benefits.
- In 17 states plus D.C., COBRA premiums for single coverage of workers consume, on average, more than one-third of UI income.
Ron Pollack, Families USA’s Executive Director concluded that “COBRA health coverage is great in theory and lousy in reality. For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured.”
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