What is COBRA?
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a U.S. federal law that allows eligible employees and their dependents to continue their group health insurance coverage for a limited period after experiencing a qualifying event, such as job loss or a reduction in work hours. Under COBRA, individuals can maintain the same health insurance plan they had while employed, but they must pay the full premium cost, including the portion their employer previously covered, making it often more expensive. COBRA typically provides coverage for up to 18 to 36 months, depending on the specific circumstances of the qualifying event.
While COBRA can be a good option in the case of a job loss or switch, it is far from flawless. Cons associated with COBRA are as follows:
- High cost: You pay the full premium, often pricier than before.
- Temporary: Lasts 18-36 months; not long-term coverage.
- Administrative hassles: Different insurers can lead to confusion.
- No subsidies: No employer help, making it costly.
- Limited flexibility: Must match prior coverage.
- Strict enrollment deadlines: 60-day limit to elect COBRA.
- Possible coverage gaps: Transition can leave you briefly uninsured.
Enter, Start Health
Instead of relying on COBRA for coverage when you are no longer insured by an employer, consider the network-free, low-premium coverage offered by Start Health. Start is a new health insurance alternative that functions as a reimbursement model. Start is not tied to an employer which allows a great deal of flexibility in comparison to COBRA.
How Does it Work?
Start members are reimbursed a predetermined set rate for each covered procedure. They can receive care from any provider (no networks) and receive reimbursement. This opens the opportunity for members to not only receive coverage for their procedures, but to potentially earn money from procedures when they choose providers that cost less than Start’s fixed reimbursable rate. For example, if the fixed reimbursement rate for a procedure is $900 and a member finds a provider that offers the procedure for $700, they would earn $200.
In addition to Start’s innovative reimbursement method, it is the only health insurance alternative that is HSA-compatible. Health Savings Accounts (HSAs) offer a unique triple-tax advantage: tax-free contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. They are completely owned by you and portable from one employer to the next. They are effective retirement vehicles as savings roll over annually and can be used for non-medical expenses after the age of 65 (these expenses will simply be subject to regular taxation).
Get a quote today at starthealth.com/quote.
