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Should you elect COBRA coverage while waiting for SSDI benefits?

If your employment has been terminated due to a long-term disability, you may receive a letter from your company about the option to continue health benefits for a limited time under COBRA.

Formally known as the Consolidated Omnibus Budget Reconciliation Act, COBRA is a federal law that requires employers with more than 20 employees to extend insurance benefits for a limited time to those who experience a qualifying life event.

Qualifying life events include termination in the absence of gross misconduct, reduction of hours, strike, military leave and more.

The benefits and drawbacks of COBRA

While you await approval on social security disability insurance (SSDI), COBRA may be one of the only health insurance options available to you. With COBRA coverage, you will be able to get the treatment you need but at a steep price. Premiums can be over 100% of the cost that your former coworkers pay for their group health insurance benefits. Additionally, benefits under COBRA are temporary, ranging from 18 to 36 months, depending on your specific situation.

Before electing COBRA, consider the health treatments you will need in the next 18 months. Will it be better to pay for these treatments out of pocket? Which option is best for your budget?

Private insurance and SSDI

Keep in mind that if and when you get approved for SSDI, the government may require you to return some of the funds you received from private insurance claims to offset the cost of the SSDI being awarded.

Your situation is unique and so are your needs. Consider your health and your budget carefully when making your choice about COBRA, and, if necessary, consult an attorney about any issues that surface with the long-term disability process.

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