COBRA Change May Help Certain College Students


People who have been laid off from their jobs and have decided to return to college should be aware that a certain provision in the recently signed $787 billion stimulus package could help them. COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act furloughed workers to continue with their former employer’s health insurance plan for as long as eighteen months.

COBRA Can Cost You An Arm & A Leg!

medical careThe insurance is expensive, costing workers the full amount that the company paid for it plus an administrative fee of 2%. For a single person that amount could be $450, but for most families that cost escalates to $1300. Oh, by the way, those are monthly charges I mentioned! No wonder that fewer than 10% of eligible people opt for COBRA.

Under the package signed by President Obama earlier this week, the law provides a federal subsidy for 65% of the premium for nine for workers who qualify. This means that if you would normally pay $450 for your monthly health premium, your rate would be reduced to just $158 during that time.

Buying Insurance On The Cheap

The subsidy applies to workers who were laid off as far back as September 1, 2008 (just before the big financial meltdown) and will include workers who are laid off for the remainder of 2009. This is particularly helpful for the student who worries about coverage while attending classes — maybe you received a decent lump sum severance when you left the company, now you can actually afford to buy insurance!

Younger workers may not see the need for COBRA or health insurance and simply may opt out. Still, if you want to be covered then private health insurance could prove to be a better value for you.

Pre-Existing Conditions? No Worries!

For those students who have pre-existing conditions, COBRA covers you. Try getting covered by a private health insurance policy if you have diabetes or some other ailment. You’ll have to wait for eligibility to kick in while COBRA will cover you right away.

Partially funded COBRA coverage could help you finish your college education. With the job market continuing to be a challenge, now you have every reason to sign up for some online classes and get your degree under your belt before the year is out.

How To Get COBRA

If y0ur company did not tell you about COBRA when you left your job or if you previously opted out of COBRA, you need to contact your former employer’s Human Resources Department to find out how you can apply. Typically, a third party provider will process your payments once everything has been set up, allowing you to receive the same coverage you had previously with a nice 65% discount to boot!

Adv. — Maintaining good credit during challenging economic times can be difficult, but it certainly isn’t impossible. Visit to find out ways you can manage your budget as well as manage your debt, keeping your finances in order to help ensure a better future for you and your family.


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Categories: Personal Advice