If a company goes out of business, are former employees still eligible for Cobra?
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Asked November 11, 2013
Unfortunately, the ability to use COBRA is dependent on having a group policy to be tied to. If the company you worked for goes out of business, the group insurance that was available for the company employees is dissolved, meaning no one in the company has health insurance and that COBRA is not a viable alternative.
COBRA is a law passed in the 1980's to help protect people's insurance if they were terminated or changed jobs. Under COBRA, you can continue your current health insurance plan after leaving the employer, provided that you pay the full premiums and any administrative fees associated with COBRA. If your employer goes out of business, there is no group plan remaining for you to use for COBRA.
Without a group plan to fall back on, you will need to find a new health insurance plan. Group insurance plans are available through many public and private organizations, including Sam's Club, AARP, and AAA, among others. Since these are group health insurance plans like you would get through an employer, you can qualify for coverage even if you have preexisting conditions which could otherwise cause you trouble.
Another option for finding a new health insurance plan is to fill out the form on this website and get a free online health insurance quote. The quote will be compared to other leading competitors so you will know you are looking at the best deal available, and if you find a company you are happy with, you can apply for coverage right away to get the coverage started as soon as possible. Keep in mind that you will have to pay the full premiums, so the prices you are quoted may be higher than those offered through your previous employer.
Answered November 11, 2013 by Anonymous